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HomeMy WebLinkAbout16. Purchase 9300 Stewart & GrayAGENDA MEMO APPROVED BY CITY MANAGER DATE: Novernber 9, 2010 TO: Mayor and Members ►f the City Council RECOMMENDATION DISCUSSION FROM: Office of the City ..r By: Desi Alvarez, ;;�;/ ty City Manager SUBJECT: ACQUISITION PROPERTY AT 9300 STEWART & GRAY ROAD AND PORTION OF 11921 -12007 WOODRUFF AVENUE FOR CONSOLIDATED CITY CORPORATE YARD That the City Council: 1) Approve entering into a purchase and sale agreement with INCO Properties, a Washington Limited Liability Company for the purchase of Real Property at 9300 Stewart & Gray Road and a portion of 11921 -12007 Woodruff Avenue in an amount of $4,155,000. 2) Approve an agreement with Frozen Food Express Industries, Inc., to assume payment of rents and related rental charges for leased property from the date that FFE vacates the leased premises until the date of the close of escrow with property owner in exchange for FFE waiving any right for costs to relocate its business operations. 3) Appropriate $2,300,000 from the Water Fund for property acquisition and related cost. The City long term facility's plan includes the consolidation of its existing maintenance facilities to improve the efficiency of its maintenance operations as well as to accommodate a future water treatment plant. On July 26, 2005, the City Council authorized staff to finalize negotiations for property acquisitions that are deemed necessary to facilitate the consolidation and expansion. As part of this effort, the City has acquired property to the east of its facilities at 9252 Stewart & Gray Road consisting of two parcels, one located at 11911 Woodruff Avenue and a second consisting of an abandoned railroad right of way. A third parcel located immediately east of and adjacent to the City's maintenance facility provides a critical connection to the two parcels previously acquired and serve as an anchor component of the future yard. The relation of the proposed acquisition with respect to existing City owned property is illustrated in Figure 1. The City has been negotiating the purchase of the third necessary property adjacent to and immediately east of 9252 Stewart & Gray Road. This property consists of a stand alone parcel used as a truck storage area fronting Stewart & Gray Road (9300 Stewart & Gray Road) and a portion of a larger property that is occupied by a cold storage CITY OF DOWNEY, CALIFORNIA building. The two pieces of property are owned by INCO Properties and leased to Frozen Food Express Industries. A parking study of the entire site has been completed. The existing on -site parking for the twenty area site is more than adequate to meet the current uses on the site. The site currently has 322 parking spaces versus 355 required; however, actual parking utilization is approximately 36 %. After the City acquires the cold storage building, the remaining site will be restriped to provide 318 required parking spaces. The City has negotiated a purchase price of $4,155,000 for the INCO property. The negotiated price includes payment for the storage area at 9300 Stewart & Gray Road and for a portion of the twenty acre parcel 11921 -12007 Woodruff Avenue containing the cold storage building and includes a ten foot easement for maintenance purposes to be retained by the seller along the easterly property line of the parcel to be split from a larger property consisting of approximately 20 acres as well as a similar easement to be provided by the Seller to the City along the southerly property line of the new parcel created by the City's purchase. As part of the purchase the City will agree to: • Process a lot line adjustment to sever the portion of property occupied by the cold storage building from the larger parcel at 11921 -12007 Woodruff Avenue. • The City will be responsible for the relocation of any utilities that will be impacted by the City as a result of its demolition and construction activities. • The City and INCO will provide maintenance agreements along a section ten feet in width across their respective common boundaries for future maintenance of their building. • INCO will provide the City with a license to occupy the easement area during the construction of its building. • INCO will have a right of first refusal to purchase the property should the City find at some future date that it does not need the property. Frozen Foods Express Industries (FFE), the current lessee, has requested the City assume any lease obligations FFE owes for the period of time between FFE's vacating of the leased premises and the close of escrow with INCO Properties. This is necessary as FFE has a lease extending through November 2011. FFE plans to relocate at its own expense and requests that its lease obligations be terminated as of November 30, 2010. The estimated cost of this lease obligation assumption is approximately $20,000. Upon the execution of the sales and purchase agreement the City and Seller will open escrow with Chicago Title Company. The City will deposit $175,000 towards the purchase price upon the opening of escrow which is refundable if the purchase of the property is not executed. Escrow is to close on January 5, 2011, or upon such a date mutually agreed to by the City and the Seller. The escrow period will afford the City time to review the condition of the property and perform any investigations it deems necessary. FISCAL IMPACT The estimated cost including the purchase price and related fees is $4,300,000. Two million dollars are available in the current budget for the property acquisition and $2,300,000 will need to be appropriated from the Water Fund. CITY - OWNED PARCEL Stewart & Gray Rd. CITY -OWNED ROW PRESENT CITY UTILITY YARD (Future Consolidated Public Works Yard) 11932 -12007 Woodruff Ave. PROPOSED ACQUISITION A copy of All Notices to: BUYER: CITY OF DOWNEY 11111 Brookshire Avenue Downey, California 90241 Tel. No.: (562) 889 -7331 Fax No.: (562) 923 -6388 Attn: City Manager Total Deposit: 4. Escrow Holder and Title Company: PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS PART I: BASIC INFORMATION 1. Seller: Buyer: Notices: SELLER: INCO PROPERTIES, INC., a Washington corporation 16400 Southcenter Parkway Suite 308 Tukwila, WA 98188 Tel. No.: (206) 394 -9630 Fax No.: (206) 394 -9633 Attn: Victor DiPietro Silver & Freedman, APLC 2029 Century Park East; 19 Floor Los Angeles, CA 90067 Tel. No.: (310) 282 -9400 Fax No.: (310) 282 -2500 Attn: Kenneth S. Fields, Esq. 2. Property Description: Property in Downey, California, particularly described in Exhibit "A" attached hereto and incorporated herein by reference ( "Property ") 9300 Stewart & Gray and portion of 11921 -12007 Woodruff Avenue, Downey, California 3. Purchase Price: $4,155,000, which shall be paid as follows: Balance: $3,980,000.00 tendered to Escrow Holder prior to Close of Escrow. S &F00607312 v8 / 7643 -310 1 $175,000.00 tendered to Escrow Holder, identified below, within 15 days of the opening of Escrow; the Total Deposit shall be deposited in an interest bearing account with interest becoming a part of, and accruing to the benefit of the party that receives the, Total Deposit; Chicago Title Company (Mike Slinger, Representative) 700 S. Flower Street, 8 Floor Los Angeles, CA 90017 Attn: Irene Meltzer, Escrow Holder Exhibit A Exhibit Al Exhibit A2 Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H Exhibit Exhibit J Exhibit K 6. Purchase and Sale. S &F00607312 v8 / 7643 -310 2 Fax No.: (213) 612 -4192 Tel No.: (213) 612 -4189 5. Exhibits: The following exhibits are attached to this Agreement and incorporated herein: Legal Description Parcel Map Site Map Escrow Instructions Form of Estoppel Certificate Form of Grant Deed Form of Contracts Assignment Form of Owner's Affidavit Certificate of Acceptance Memorandum of Right of First Refusal Lease Assignment Easement and Maintenance Agreement Licensed Area THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS ( "Agreement ") is made by and between SELLER, identified above in Part I, and BUYER, identified above in Part I and being a municipal corporation duly organized and existing under the laws of the State of California, effective as of the Effective Date as defined in Section 37 below. PART II: TERMS IN ADDITION TO THOSE CONTAINED IN PART I 6.01 Property. Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller the entirety of the "Property," which shall include all improvements thereon, identified above. As provided for below and in Exhibit B (Escrow Instructions), Seller shall deliver the Grant Deed (as defined below) to Buyer through escrow. The status of title to the Property shall be subject to Buyer's approval or disapproval as provided for elsewhere in this Agreement. Seller shall not sell and Buyer shall not buy any moveable personal property owned by Seller or parties in possession, but Buyer shall have the obligation, at its sole cost and expense, to dispose of or otherwise address any such moveable personal property which remains at the Property as of the Close of Escrow. 6.02 "As Is" Condition: Release. Buyer agrees that the Property is being sold and conveyed hereunder "as is," "where is" and "with all faults" and subject to any condition which may exist, without any representation or warranty by Seller except as expressly set forth in this Agreement. Other than the representations and warranties expressly set forth in this Agreement, Buyer hereby expressly acknowledges and agrees that Buyer is relying solely upon its inspections, examination, and evaluation of the Property by Buyer in purchasing the Property on an "as is," "where is" and "with all faults" basis. Further, and without limitation, except as specifically set forth in this Agreement, it is understood and agreed that neither Seller nor any of its partners, agents, employees or contractors has made and is not now making, and Buyer has not relied upon and will not rely upon (directly or indirectly), any warranties, representations or guaranties of any kind or character, express or implied, oral or written, past, present or future, with respect to the Property, including, but not limited to, warranties, representations or guaranties as to (i) matters of title, (ii) environmental matters relating to the property or any portion thereof, (iii) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water and earthquake faults and the resulting damage of past and /or future earthquakes, (iv) whether, and to the extent to which, the property or any portion thereof is affected by any stream (surface or underground), body of water, flood prone area, flood plain, floodway or special flood hazard, (v) drainage, (vi) soil conditions, including the existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any undershoring, (vii) zoning to which the property or any portion thereof may be subject, (viii) the availability of any utilities to the property or any portion thereof including, without limitation, water, sewage, gas and electric, (ix) usages of adjoining property, (x) access to the property or any portion thereof, (xi) the value, compliance with the plans and specifications, size, location, age, use, design, quality, descriptions, suitability, structural integrity, operation, title to, or physical or financial condition of the property or any portion thereof, (xii) any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the property or any part thereof, (xiii) the presence of hazardous substances in or on, under or in the vicinity of the property, (xiv) the condition or use of the Property or compliance of the Property with any or all past, present or future federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (xv) the existence or non - existence of underground storage tanks, (xvi) any other matter affecting the stability or integrity of the real property, (xvii) the potential for further development of the Property, (xviii) the existence of vested land use, zoning or building entitlements affecting the Property, (xix) the merchantability of the Property or fitness of the property for any particular purpose (Buyer affirming that Buyer has not relied on the skill or judgment of Seller or asset manager or any of their respective agents, employees or contractors to select or furnish the Property for any particular purpose, and that Seller makes no warranty that the Property is fit for any particular purpose) or (xx) tax consequences (including, but not limited to, the amount, use or provisions relating to any tax credits). Buyer further acknowledges that any information of any type which Buyer has received or may receive from Seller or any of seller's agents, employees or contractors including, without limitation, any environmental reports and surveys, is furnished on the express condition that Buyer shall not rely thereon, but shall make an independent verification of the accuracy of such information, all such information being furnished without any representation or warranty whatsoever. Buyer has conducted, or by the closing will conduct, such inspections and investigations of the Property as Buyer deemed or shall deem necessary, including, but not limited to, the physical and environmental conditions thereof, and shall rely upon the same. Upon closing, Buyer shall assume the risk that adverse matters, including, but not limited to, adverse physical and environmental conditions, may not have been revealed by Buyer's inspections and investigations. Buyer further acknowledges and agrees that there are no oral agreements, warranties or representations, collateral to or affecting the property by seller, any agent, employee or contractor of Seller, or any third party. Seller is not liable or bound in any manner by any oral or written statements, representations, or information pertaining to the property furnished by Seller, any real estate broker, contractor, agent, employee, servant or other person. Buyer acknowledges that the S&F00607312 v8 / 7643 -310 3 purchase price reflects the "as is" nature of this sale and any faults, liabilities, defects or other adverse matters that may be associated with the Property. Buyer has fully reviewed the disclaimers and waivers set forth in this agreement with its counsel and understands the significance and effect thereof. The terms and conditions of this section shall expressly survive the closing, not merge with the provisions of any closing documents and shall not be incorporated into the deed. Buyer and anyone claiming by, through or under Buyer (the "Buyer Parties "), hereby waive their rights to recover from and fully and irrevocably release Seller and its shareholders, employees, officers, directors, representatives, agents, servants, attorneys, affiliates, parent, subsidiaries, successors and assigns, and all persons, firms, corporations and organizations in its behalf ( "Released Parties ") from any and all claims, responsibility and /or liability that they may now have or hereafter acquire against any of the Released Parties for any costs, loss, liability, damage, expenses, demand, action or cause of action arising from or related to (i) the condition (including any construction defects, errors, omissions or other conditions, latent or otherwise, and the presence in the soil, air, structures and surface and subsurface waters of materials or substances that have been or may in the future be determined to be hazardous substances or otherwise toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and /or removed from the Property under current or future federal, state and local laws regulations or guidelines), valuation, salability or utility of the Property, or its suitability for any purpose whatsoever, and (ii) any information furnished by the Released Parties under or in connection with this Agreement. This release includes claims of which the Buyer Parties are presently unaware or which the Buyer Parties do not presently suspect to exist which, if known by the Buyer Parties, would materially affect the Buyer Parties release Seller. The Buyer Parties specifically waive the provision of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR." In this connection and to the extent permitted by law, the Buyer Parties hereby agree, represent and warrant that the Buyer Parties realize and acknowledge that factual matters now unknown to it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses which are presently unknown, unanticipated and unsuspected, and the Buyer Parties further agree, represent and warrant that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Buyer nevertheless hereby release, discharge and acquit Seller from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses. Seller and the Buyer Parties have each initialed this section to further indicate their awareness and acceptance of each and every provision hereof. Seller Buyer S&F00607312 v8 / 7643 -310 4 6.03 Frozen Food Express. Buyer acknowledges that the Property is subject to a lease (the "Frozen Food Express Lease ") pursuant to which Frozen Food Express ( "Frozen Food Express ") leases the Property and Buyer is willing to acquire the Property subject thereto or free of the Frozen Food Express Lease, whichever condition the Property may be in at the Close of Escrow. However, Seller shall not be obligated to accept any early termination proposal or attempt except as may be expressly set forth in the Frozen Food Express Lease and Buyer acknowledges that Seller expects Frozen Food Express (or its permitted assigns under the Frozen Food Express Lease) to continue to perform all obligations under the Frozen Food Express Lease through and including the Close of Escrow. This provision shall survive the Close of Escrow and shall not be merged with the Grant Deed or any other closing documents. 7. Purchase Price, Buyer shall pay to Seller the Purchase Price for the purchase of the Property. Buyer shall remit payment of the Purchase Price, in accordance with Section 3 of Part I above, to Escrow Holder. If the sale and purchase of the Property closes, the Total Deposit, defined above, shall be applied to the Purchase Price and Buyer shall remit to Escrow Holder the Balance prior to or on the Close of Escrow Date, as defined below. If the sale and purchase of the Property does not close, the Total Deposit, and the Balance, if it had been remitted to the Escrow Holder, shall be promptly returned to Buyer. 8. Opening and Closing of Escrow, 8.01 Opening of Escrow. The parties shall open escrow (the "Escrow ") at the Escrow Holder, identified in Section 4 of Part I above, by (a) depositing a fully executed original of this Agreement and (b) Buyer delivering the Total Deposit; in each case to Escrow Holder within fifteen (15) days of the Effective Date (as defined below). The provisions of this Agreement shall constitute joint primary escrow instructions to the Escrow Holder and the parties shall execute such additional instructions as reasonably requested by the Escrow Holder that are not inconsistent with the provisions hereof. In the event of a conflict between such additional instructions and this Agreement, the provisions of this Agreement shall control. Escrow Holder shall deliver written confirmation of the date when the Escrow Holder shall receive the Total Deposit from Buyer and the executed counterparts of this Agreement from both Seller and Buyer ( "Opening of Escrow ") of the Opening of Escrow to the parties at the addresses set forth in Section 1 of Part I above. 8.02 Close of Escrow or Closing Date. The Escrow shall close ( "Close of Escrow" or "Closing ") on January 5, 2011 or on such earlier date mutually agreed upon between Seller and Buyer (the "Closing Date "). 9. Conditions and Contingencies to Purchase. Seller and Buyer agree that there are conditions and contingencies to the sale and purchase of the Property, which are set forth in this Agreement and in Exhibit B (Escrow Instructions). 9.01 Conditions. The following conditions must be satisfied or waived by Buyer prior to the Close of Escrow: (a) Due Diligence Period; Investigation of Property. Buyer shall have until 5 business days before the Closing ( "Due Diligence Period ") to review the status and condition of the Property such as, but not limited to, examine all documents and records S&F00607312 v8 / 7643 -310 5 relating to the Property, and make or obtain such inspections, investigations, and tests as Buyer may elect to determine the status and condition of the Property. (b) Survey; Title. Buyer, at its sole cost and expense, may obtain an ALTA Survey of the Property ( "Survey ") sufficient for the Title Company to issue an ALTA or CLTA policy of title insurance. All encumbrances, liens, covenants and other title exceptions appearing on the TC (as defined on Exhibit B) or discernable by a visual inspection or survey and not disapproved by Buyer in writing to Seller prior to the Closing are hereinafter referred to as the "Permitted Exceptions." If the Frozen Food Express Lease is in existence as of the Close of Escrow it shall automatically be a Permitted Exception and Buyer shall have no right to disapprove thereof. Buyer shall disapprove any exceptions to title set forth in the TC by written notice delivered to Seller within 15 days following its receipt of the TC, which notice shall describe the disapproved item in reasonable details. Seller shall have 15 days following its receipt of any such written disapproval notice within which to elect, in its sole and absolute discretion by written notice to Buyer, to cure or not cure such disapproved item, and Seller's failure to deliver a written election shall be deemed an election not to cure. Notwithstanding the foregoing, Seller shall be obligated to cure certain title exceptions as provided in Paragraph 13 below. If Seller elects not to cure a title exception disapproved by Buyer, then Buyer's sole remedy shall be to elect either to terminate this Agreement or accept title and proceed to Closing without cure and without reduction in the Purchase Price. (c) Third Party Reports. Buyer acknowledges that Seller provided (or may hereafter provide) documentation or reports to Buyer which were (or will be) prepared by third parties other than Seller. Buyer further acknowledges, confirms, and agrees that (i) neither Seller nor any of its shareholders, partners, agents, employees or contractors has made any warranty or representation regarding the truth, accuracy or completeness of any such reports or documents or the source(s) thereof, and Buyer has not relied on the truth or completeness thereof, and (ii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of said reports or documents and is providing the same (or making them available to Buyer) solely as an accommodation to Buyer. (d) Buyer's Disapproval of Property. Prior to the expiration of the Due Diligence Period, Buyer, in its sole discretion, may disapprove of the Property pursuant to this Section 9.01(d) for any reason. If Buyer disapproves of the Property pursuant to this Section 9.01(d), Buyer shall provide Seller with written notice of Buyer's disapproval of the Property prior to the expiration of the Due Diligence Period and this Agreement shall terminate and Escrow Holder shall promptly return the total on deposit with Escrow Holder at the time, and except as set forth in this Agreement, neither Buyer nor Seller shall have any further rights or obligations hereunder. (e) Due Diligence Documentation. There are no Contracts or Leases, as such terms are defined below, affecting or binding the Property other than those delivered to Buyer pursuant to Section 12 below. (f) Contingencies. The proposed use and purchase of the Property is subject to approval by the City Council in its sole and absolute discretion. If the City Council disapproves of the proposed use or purchase of the Property, Buyer shall have the right S&F00607312 v8 / 7643 -310 6 to terminate this Agreement for any reason prior to the expiration of the Close of Escrow. 10. Permit to Enter Seller's Property; Indemnity,. Subject to the rights of Frozen Food Express, Seller shall permit Buyer and Buyer's authorized agents and representatives to enter the Property at all reasonable times (and upon prior written notice to Seller) during normal business hours until the Close of Escrow or the termination of this Agreement, whichever shall occur first, for the purpose of making inspections, investigation and testing pursuant to Section 9. Buyer shall notify Seller, in writing, of its intention, or the intention of its agents or representatives, to enter the Property at least forty -eight (48) hours prior to such intended entry and obtain Seller's prior written consent to any inspections, studies and tests to be conducted (which consent shall not be unreasonably withheld). At Seller's option, Seller may be present for any inspection, test or study. Buyer shall bear the cost of all inspections, tests and studies. Notwithstanding the foregoing or anything herein to the contrary, in no event shall Buyer make any invasive physical testing (environmental, structural or otherwise) at the Property, such as soil borings, water samples and the like, without Seller's prior written consent. In the event City desires to conduct any physical testing (environmental, structural or otherwise), City will identify in writing exactly what procedures City desires to perform and request Seller's express written consent. Seller may withhold or condition consent to any invasive physical testing in Seller's sole and absolute discretion. However, if Seller withholds consent to Buyer's request to conduct necessary physical testing, then Buyer may terminate this Agreement. In conducting any investigations, inspections, tests and studies of the Property, Buyer and its agents and representative shall (i) comply with all terms of all tenant leases (including the Frozen Food Express Lease) concerning the Seller's larger, multi - building industrial project (the "Larger Project ") regarding entry rights and obligations of third parties and not disturb the tenants or interfere with their use of the Property pursuant to their leases; (ii) not interfere with the operation, use and maintenance of the Property; (iii) not damage any part of the Property or any personal property owned or held by any tenant or any third party; (iv) not injure or otherwise cause bodily harm to Seller or any of its partners, agents, contractors and employees, or any tenant or other third party; (v) promptly pay when due the costs of all tests, investigations, studies and examinations done with regard to the Property; (vi) not permit any liens to attach to the Property by reason of the exercise of its rights hereunder; (vii) restore the Property to the condition in which the same was found before any such inspections, tests or studies where undertaken; (viii) not reveal or disclose any information obtained prior to closing concerning the Property to anyone outside Buyer's organization, and (ix) comply with the agreed upon procedures and with any and all laws, ordinances, rules, and regulations applicable to the Property and will not engage in any activities which would violate any permit, license, or environmental law or regulation. Any damage resulting from such testing or from any other due diligence activity of Buyer shall be promptly repaired or caused to be repaired by Buyer at Buyer's sole cost and expense. Buyer shall hold harmless, defend and indemnify Seller from all liability, costs, damage and claims arising from any bodily injury, property damage or mechanics' lien claims resulting from (i) entry and activities on the Property by Buyer, its consultants, agents, employees and contractors or (ii) violation by Buyer of this provisions of this Agreement including, without limitation, the Buyer Covenants (as defined below) and the obligations of Buyer under the License provisions set forth in S &F00607312 v8 / 7643 -310 7 Section 18 below. Notwithstanding any provision to the contrary contained in this Agreement, Buyer's obligations and indemnity set forth in this section shall survive the closing or earlier termination of this Agreement and shall not be merged with the Grant Deed or any other closing documents. Notwithstanding the foregoing, Buyer shall not be liable to Seller, nor shall Buyer have any obligation to hold harmless, defend or indemnify Seller from any liability, costs, damage or claims which are related to pre- existing adverse conditions affecting the Property (except to the extent exacerbated by Buyer). Seller acknowledges that Buyer self- insures with respect to claims for bodily injury and property damage. 11. Prorations and Closing Costs. All unpaid, current, non - delinquent real property taxes and assessments attributable to the Property shall be prorated as of the Close of Escrow. Buyer shall credit Seller with all pre -paid real property taxes and assessments attributable to the Property. Any real property taxes and assessments arising out of the sale of the Property to Buyer or its assignee or a subsequent sale or change in ownership thereafter, and /or arising out of any construction pertaining to the Property following the closing, shall be paid by Buyer when assessed. Notwithstanding any provision of this Agreement, Seller shall not be charged for any such taxes or assessments to the extent that Frozen Food Express is obligated to pay such amounts pursuant to the Frozen Food Express Lease, in which case Buyer's sole source of recovery with respect to such amounts shall be against Frozen Food Express. Buyer discloses that as a public agency, Buyer is exempt from transfer taxes arising from this transaction and real property taxes for the Property. Buyer shall pay the fee of Escrow Holder, all costs of any survey, title report, commitment or policy obtained by Buyer, any and all transfer taxes payable in connection with the conveyance of the Property, the costs of Buyer's due diligence and the fees of Buyer's attorney. Seller shall pay the fees of Seller's attorney. The following items shall be prorated between Seller and Buyer at the Closing by increasing or decreasing, as the case may be, the funds to be delivered by Buyer at the Closing, with all items pertaining to the month of closing to be prorated based on the actual number of days in the month in which the closing occurs: All rents, reimbursements, income, revenue and other charges pertaining to the Frozen Food Express Lease or otherwise with respect to the Property (collectively, "Revenues ") actually collected by Seller on or prior to the Closing shall be prorated such that Seller shall be entitled to all such Revenues accruing up to and including the day prior to the Closing, and Buyer shall be entitled to all such Revenues for the date of Closing and all periods thereafter. All costs and expenses with respect to the operation and maintenance of the Property, including without limitation, under any contracts, utilities not billed directly to Frozen Food Express, and all assessments, dues or other charges due under any covenants, conditions and restriction against the Property, shall be prorated such that Seller shall be responsible for all such costs and expenses to and including the day prior to the Close of Escrow and Buyer shall be responsible for all such costs and expenses for the date of Close of Escrow and all periods thereafter. Buyer shall take all steps necessary to (a) effectuate the transfer of all utilities to its name or (b) terminate all utilities, as of the Close of Escrow. S &F00607312 v8 / 7643 -310 8 Notwithstanding any provision of this Agreement to the contrary, Seller shall not be charged for any such amounts to the extent that Frozen Food Express is obligated to pay such amounts pursuant to the Frozen Food Express Lease, in which case Buyer's sole source of recovery with respect to such amounts shall be against Frozen Food Express. Within three (3) months following the Closing (or such earlier date after the Closing when such figures are available), Seller and Buyer shall reprorate real and personal property taxes and other items of income and expenses based upon actual bills or invoices received after the Closing (if original prorations were based upon estimates) and any other items necessary to effectuate the intent of the parties that all income and expense items be prorated as provided above in this section. Any reprorated items shall be promptly paid to the party entitled thereto. The proration provisions of this Section 11 shall survive Closing for a period of one hundred eighty (180) days. 12. Documents: Tenants; Occupants. Within 15 days after the Opening of Escrow, Seller shall, to the extent in its possession, provide to Buyer a true, accurate and complete: A. Copy of all contracts ( "Contracts ") for services at the Property; B. Copy of all recorded or unrecorded leases or other agreements that grant the possession, occupancy or use of the Property, or any portion thereof ( "Leases "). C. List of the names of all persons and /or entities having the right to possess, occupy or use the Property, the amount of rent, security deposit, if any, and the length of time remaining on such right. D. Original executed Estoppel Certificates, in the form attached hereto and made a part hereof as set forth in Exhibit "C," from each tenant having the right to possess, occupy or use the Property; provided, however, that with respect to Frozen Food Express, the Estoppel Certificate may be in the form required in the Frozen Food Express Lease. Notwithstanding any provision of Section 12 to the contrary, Seller shall have until the date which is fifteen (15) days before the expiration of the Due Diligence Period to deliver the Estoppel Certificates. 13. Monetary Obligations. Seller shall pay in full prior to or concurrently with the Close of Escrow any deeds of trust or other monetary encumbrances created by Seller and all fees or expenses owed to the beneficiaries thereof. 14. Seller's Representations, Warranties and Covenants. The following representations, warranties and covenants of Seller are true as of the date Seller executes this Agreement and shall be true and correct as of the Close of Escrow. The representations and warranties of Seller shall be deemed modified to reflect any facts or circumstances subsequently set forth in writing to Buyer or in any third party report which may have been provided to Buyer or which are otherwise known to Buyer prior to the Close of Escrow. Buyer's rights with respect to the following representations, warranties and covenants, as appropriate, shall survive the Close of Escrow for only a period of 365 days. Such representations and warranties are based solely upon the facts and circumstances actually known to Victor DiPietro, without any duty of inquiry. S&F00607312 v8 / 7643 -310 9 In no event shall Mr. DiPietro have personal liability with respect to this Agreement or the representations or warranties contained herein. If, prior to the Close of Escrow, Buyer gains knowledge that a representation or warranty of Seller contained in this Agreement is or becomes untrue and Buyer nonetheless proceeds to Close of Escrow, then Buyer shall be deemed to have waived any claims with respect to such untrue representation or warranty. 14.01 Power and Authority of Seller. Seller is the sole owner of the Property and has the requisite right, power and authority to sell, convey and transfer the Property to Buyer, as provided herein, and to enter into and carry out the terms of this Agreement and the execution and delivery hereof and of all other instruments referred to herein. The performance by Seller of Seller's obligations hereunder will not violate or constitute an event of default under the terms and provisions of any agreement, document or instrument to which Seller is a party or by which Seller is bound. All proceedings required to be taken by or on behalf of Seller to authorize it to make, deliver and carryout the terms of this Agreement have been duly and properly taken. No further consent of any person or entity is required in connection with the execution and delivery of, or performance by Seller of its obligations under this Agreement. 14.02 Validity of Agreement. Upon execution, this Agreement is a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. 14.03 Leases. Seller represents that the copies of all Leases, if any, delivered by Seller to Buyer are true and correct copies thereof and are in full force and effect, that the Leases are the only leases affecting the Property, and that the tenants under the Leases are the only tenants of the Property. There are no other agreements, written or oral, with respect to the tenancies. There are no material defaults under any of the Leases nor have events occurred that with notice or passage of time, or both, would constitute a material event of default thereunder. Seller has not made any assignment, transfer or other disposition of all or any part of its interest in any of the Leases. 14.04 Contracts. The copies of the Contracts, if any, delivered by Seller to Buyer are true, complete and correct copies of all Contracts relating to the Property and; provided that Buyer pays all termination fees, costs, penalty or other amounts necessary to terminate any particular Contract prior to Closing, Seller will terminate such Contract and such Contract will not survive the Close of Escrow. There are no defaults thereunder and there exists no condition that, with the passage of time, the giving of notice, or both, would constitute such a default. 14.05 Use Permits: Compliance with Law. Within the twenty -four (24) months preceding the date of this Agreement, Seller has not received written notice of any violation of any licenses, approvals, permits and certificates necessary for the occupancy of the Property which remain in effect. 14.06 Hazardous Material: Buyer Acknowledgements. Except for that certain report prepared by URS Corporation for the County of Los Angeles, dated September 14, 2006 (the "URS Report ") (which pertains to removal of underground storage tanks from a portion of the Larger Project) and a "no further action" letter dated July 23, 2007 and issued by the County of Los Angeles Department of Public Works, Seller has not provided Buyer with any environmental reports for the Property because it does not have any knowledge of such reports (other than the URS Report and "no further action" S &F00607312 v8 / 7643 -310 10 letter) in its possession. Seller has no current or actual knowledge of any Hazardous Materials on or under the property in violation of applicable laws. To the current, actual knowledge of Seller, there is no pending investigation, written request for information, written notice of violation, written notice of responsibility, governmental or third -party claim with respect to the Property under any Environmental Law, or any administrative or judicial orders, decree or proceedings pending with respect to the Property under any Environmental Law. As used in this Agreement, the following definitions shall apply: "Environmental Law(s)" shall mean all federal, state and local laws, ordinances, rules and regulations now or hereafter in force, as amended from time to time, in any way relating to or regulating human health or safety, or environmental evaluations of public yard sites, or industrial hygiene or environmental conditions, or protection of the environment, or pollution or contamination of the air, soil, surface water or groundwater, and includes, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq. ( "CERCLA "), The Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., the Clean Water Act, 33 U.S.C. § 1251, et seq., the Hazardous Substance Account Act, California Health and Safety Code § 25300, et seq., the Hazardous Waste Control Law, California Health and Safety Code § 25100, et seq., the Medical Waster Management Act, California Health and Safety Code § 25015, et seq., the Porter - Cologne Water Quality Control Act, California Water Code § 13000, et seq., and California Code of Regulations, Title 5 § 14010 et seq. "Hazardous Materials" shall mean any substance in quantities that are described as toxic or hazardous, explosive, radioactive, or a pollutant or contaminant or infectious waste, or words of similar import, in any of the Environmental Laws, and includes, but is not limited to, asbestos, petroleum or petroleum products (including, without limitation, crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel, or any mixture thereof), polychlorinated byphenyls, urea formaldehyde, radon gas, radioactive matter, medical waste, and chemicals which may cause cancer or reproductive toxicity. 14.07 Natural Hazards Disclosure. Buyer acknowledges that neither Seller nor anyone on behalf of Seller has made any representations, statements or warranties regarding the location of the Property within any Natural Hazard Areas (as hereinafter defined). Buyer specifically acknowledges and agrees that, to the extent Seller has made or in the future makes any information regarding the Natural Hazard Disclosure Statement available to Buyer, Seller has done and will be doing so only as an accommodation to Buyer and that Seller has made, is making and shall make no representation or warranty of any nature concerning the accuracy or completeness of the Natural Hazard Disclosure Statement. Buyer acknowledges and agrees that Buyer shall conduct its own investigations and studies of the Property as it deems necessary or appropriate to determine whether or not the Property is located in any Natural Hazard Area. Seller shall have absolutely no liability if the Property is located in any Natural Hazard Area and Buyer assumes all risk relating thereto. As used herein, the term "Natural Hazard Area' shall mean those areas identified as natural hazards in the Natural Hazard Disclosure Act, California Government Code Sections 8589.3, 8589.4 and 51183.5, and California Public Resources Code Sections 2621.9, 2694, and 4136, and any successor statutes or laws (the "Act "). Before the Close of Escrow, Seller shall provide Buyer with a Natural Hazard Disclosure Statement ( "Disclosure Statement''). Buyer acknowledges that the Disclosure Statement is being delivered pursuant to the Act. Buyer acknowledges and agrees that nothing contained in the Disclosure S&F00607312 v8 / 7643 -310 11 Statement shall release Buyer from its obligation to determine, whether the Property is located in any Natural Hazard Area and that the matters set forth in the Disclosure Statement may change on or prior to the Close of Escrow and that Seller has no obligation to update, modify or supplement the Disclosure Statement. Only Buyer may rely on the Disclosure Statement and Buyer shall not provide the Disclosure Statement to any other party. In the event that, prior to the Close of Escrow, the Act is modified to provide either that (a) disclosure of Natural Hazard Areas is not required in the transfer of commercial property like the Property, or (b) a buyer of commercial property like Buyer can waive the disclosure of Natural Hazard Areas under the Act, then Seller may elect not to provide the Natural Hazard Disclosure Statement to Buyer, and Buyer hereby knowingly, voluntarily and intentionally waives its right to disclosure of Natural Hazard Areas found in the Act. 14.08. Litigation. To Seller's current, actual knowledge, there are no pending actions, suit, arbitrations, claims or judicial, municipal or administrative proceedings, at law or in equity, affecting all or any portion of the Property or in which Seller is a party by reason of Seller's ownership of the Property. 14.09 Other Contracts. Seller has not entered into any other contracts for the sale of the Property, nor does any third party hold any rights of first refusal or options to purchase the Property. 14.10 Brokerage Fees. Seller represents and warrants to Buyer that no broker or finder has been engaged by Seller in connection with the transaction contemplated by this Agreement, or to Seller's knowledge are in any way connected with such transaction. Seller shall indemnify, defend and hold harmless Buyer from and against any all claims by any broker in connection with this transaction claiming by or through Seller. The foregoing indemnity shall survive the Close of Escrow. 15. Covenants of Seller Prior to Closing. Until the earlier of (a) Close of Escrow or (b) the termination of this Agreement, Seller shall, in addition to the covenants set forth elsewhere in this Agreement, do all of the following: 15.01 Maintenance of Property. Maintain the Property in accordance with Seller's historical practices, and use commercially reasonable efforts to cause Frozen Food Express to maintain the Property in accordance with the obligations of the Frozen Food Express Lease, up until the Close of Escrow or the termination of this Agreement, whichever shall first occur. Seller covenants and agrees to advise Buyer promptly of any material change in the physical condition of the Property, or of any damage or destruction to the Property actually known to Seller. 15.02. Insurance. Maintain existing insurance coverage for the Property. 15.03 Encumbrance, Lien. Not permit or suffer any encumbrance, charge or lien to be placed or claimed upon the Property by reason of Seller's acts unless such encumbrance, charge or lien has been approved in writing by Buyer or unless such monetary encumbrance, charge or lien will be removed by Seller prior to the Close of Escrow. S &F00607312 v8 / 7643 -310 12 15.04 Lease. . Not execute any new lease or amend, modify, renew or extend any existing lease of the Property, except as may be required pursuant to any existing lease. 15.05 Contract. Not enter into any Contract which will survive the Close of Escrow without prior written consent of Buyer, which consent may be withheld in Buyer's reasonable discretion. 15.06 Change. Promptly notify Buyer in writing if any of the representations and warranties set forth in this Agreement are no longer material true and correct. 15.07 Convey. Not sell, convey, assign, transfer, encumber or otherwise dispose of the Property, including, without limitation, the Improvements, or any part thereof or interest therein, and shall not make any modifications or alterations to the Property, except as required under any existing lease. 16. Buyer Covenants. Buyer covenants with Seller as set forth in this Section 16 (the "Buyer Covenants ") and Buyer Covenants shall survive the Close of Escrow and shall not be merged with the Grant Deed or any other Closing Documents. The indemnity, defense and hold harmless obligations of Buyer pursuant to Section 10 of this Agreement shall expressly apply, without limitation, to the Buyer Covenants. The Buyer Covenant set forth in Section 16.5, shall be recorded against the Property at Close of Escrow in the form set forth on Exhibit H attached hereto and incorporated herein (the "Memorandum of Right of First Refusal ") and the Memorandum of Right of First Refusal shall bind Buyer and its successors and assigns. The provisions of Section 16.02 and 16.03 below shall be satisfied by Buyer in cooperation and consultation with Seller and in a manner that most minimizes interference with the use, occupancy or enjoyment of the Larger Project by any tenant thereof. 16.01 Parking. Buyer represents that the parking at the portion of the Larger Project retained by Seller immediately following the Close of Escrow (the "Seller's Remaining Property ") is sufficient and shall remain sufficient parking for the Seller's Remaining Property even in the event that any or all improvements on Seller's Remaining Property are rebuilt in whole or in part (and in substantially the same manner) for substantially the same use following a casualty ( "Sufficient Parking "). However, at any time either before or after the Close of Escrow, Seller may elect to pursue (at Seller's sole cost and expense) a variance providing that the parking at the Seller's Remaining Property is Sufficient Parking (the "Parking Variance "). If Seller elects to pursue the Parking Variance, then Buyer shall cooperate (at Buyer's sole cost and expense) with Seller in obtaining the Parking Variance. The provisions of this Section 16.01 shall survive the Close of Escrow. 16.02 Utilities; Drainage. Following the Close of Escrow but prior to any demolition or construction at the Property, Buyer shall, at Buyer's sole cost and expense, (a) cause all utility lines and other infrastructure shared by the Property and Seller's Remaining Property to be severed, (b) cause all such severed utilities lines serving Seller's Remaining Property and the Property to be separately re- connected to the applicable main line, (c) install a water meter selected by Seller in a location designated by Seller for landscaping purposes on Seller's Remaining Property, (d) install an electrical meter selected by Seller in a location designated by Seller for the two lights on Seller's Remaining Property and relocate one of those lights (and install a S &F00607312 v8 / 7643 -310 13 breaker box for selected by Seller for such light) to a location on Seller's Remaining Property designated by Seller, and (e) cause electricity to be connected to the garage on Seller's Remaining Property. The obligations of Buyer under this Section 16.02 shall be subject to the provisions of Section 10 of this Agreement which shall survive the Close of Escrow for the purposes of this Section 16.02 and as otherwise may be provided for in this Agreement. 16.03 Demolition and Construction: Fencing. As set forth in Section 17.03 of this Agreement, Buyer intends to conduct demolition and construction activities at the Property following the Close of Escrow. Adjacent to the east of the Property is situated a building (the "Adjacent Building ") located on Seller's Remaining Property (and as identified on Exhibit A2 (the "Site Map ") attached hereto and incorporated herein). At all times during any demolition or construction work at the Property, Buyer shall provide subjacent and other support to the Adjacent Building as necessary to prevent damage and, following the Close of Escrow, Buyer shall erect and maintain a security fence around the Property which blocks the view of the Property from Seller's Remaining Property. Promptly following both the demolition and the construction work, Buyer shall paint the exterior side of the Adjacent Building which faces the Property with paint satisfactory to Seller. If at any time during, or as a result of, the demolition work or the construction work, the Adjacent Building is damaged or destroyed, such damage or destruction shall be presumed to have been caused by Buyer's activities and Buyer shall repair or restore, as appropriate, such damage or destruction. The foregoing presumption is rebuttable by Buyer. Prior to the Close of Escrow Seller and Buyer shall conduct a joint walk- through of the Adjacent Building to determine the condition thereof and may memorialize such condition by taking photographs. Promptly following (but in no event more than 10 business days of the Close of Escrow), Buyer shall construct a temporary screened fence along the southern boundary line of the Property and the Seller's Remaining Property. Upon the Cornmencement Date of the License (as provided for in Section 18), Buyer shall move the temporary fence to correspond to the southern boundary line of the License Area running to the concrete block wall denoted on the Site Map at the eastern boundary line of the Property. Upon the expiration of the License, if the building constructed by Buyer on the Property does not extend all the way to said block wall, then Buyer shall construct and maintain (on its own property) a permanent screened fence, block wall or similar visually screened blockade along the southern boundary line between the Property and the Seller's Remaining Property. The provisions of this Section 16.03 shall survive the Close of Escrow. 16.04 Lot Line Adiustment. Promptly following the Close of Escrow, Buyer shall cause to be issued and recorded, at Buyer's sole cost and expense, a lot line adjustment necessary to cause the legal description of the Property to conform to the legal description and parcel map attached hereto as Exhibit "A" and Exhibit "A-1", respectively. 16.05 Right of First Refusal. Buyer acknowledges and agrees that, following the Close of Escrow, Seller shall have a right of first refusal to acquire the Property for its then current fair market value, as determined by an MAI appraiser reasonably acceptable to both Buyer and Seller. 17. Buyer's Representations and Warranties. Buyer hereby covenants that the following representations and warranties of Buyer are true and shall be true and correct S &F00607312 v8 / 7643 -310 14 as of the Close of Escrow. Seller's rights with respect to the following representations and warranties, as appropriate, shall survive the Close of Escrow: 17.01 Validly Formed; Power of Authority of Buyer. Buyer is a municipal corporation duly organized and existing under the laws of the State of California and duly qualified to conduct business activities in the State of California. 17.02 Validity of Agreement. Buyer's authority to into this Agreement is subject to approval by the City Council of Downey but Buyer's execution hereof shall constitute evidence that such approval has been granted. 17.03 Casualty. Buyer acknowledges that it is purchasing the Property with the intent of demolishing all of the buildings and improvements located thereon in order to construct an integrated maintenance yard using the Property and other properties owned by the Buyer which are adjacent to the Property (the "Work "). Accordingly, Buyer shall have no right to terminate this transaction if the Property or the improvements located thereon are damaged by fire or other casualty. In such instance, Buyer shall nonetheless be required to close and perform under this Agreement, and Buyer waives any statute or other right which would otherwise allow Buyer to terminate this Agreement following a fire or other casualty. 17.04 Brokerage Fees. Buyer represents and warrants to Seller that no broker or finder has been engaged by Buyer in connection with the transaction contemplated by this Agreement, or to Buyer's knowledge are in any way connected with such transaction. Buyer shall indemnify, defend and hold harmless Seller from and against any all claims by any broker in connection with this transaction claiming by or through Buyer. The foregoing indernity shall survive the Close of Escrow. 18. License Aareement. Following the Close of Escrow, Seller shall license, on a non- exclusive basis, (the "License ") the area set forth on Exhibit K (the "Licensed Area ") to Buyer for entry onto the Licensed Area only for staging and /or other pre - construction or construction purposes related to the Work; provided that Buyer shall not use the Licensed Area for general access, ingress or egress and shall not affix anything to the Licensed Area, commit waste or violate law (the "Permitted Use ") and otherwise in accordance with the provisions of this Section 18. The term of the License shall commence on the 90 day following receipt by Seller (the "Commencement Date ") of a written notice from Buyer that it is prepared to commence the Work. The term of the License shall expire on the earlier to occur of (a) the 365 day after the Commencement Date or (b) the date on which Buyer could reasonably cease using the Licensed Area for the Permitted Use. Buyer shall take commercially reasonable efforts to relocate all activities related to the Work from the Licensed Area by or before the 270 day after the Commencement Date or as otherwise as soon as possible. Buyer shall comply with the provisions of Section 16.03 at all times during the term of the License. The License and the exercise of Buyer's rights thereunder shall be subject to the hold harmless, defense and indemnity obligations of Buyer set forth in Section 10 above. The provisions of this Section 18 shall survive the Close of Escrow. 19. Security Deposits. Seller shall retain the security deposits, if any, of any Leases, and the unapplied amounts thereof shall be credited to the Purchase Price. S &F00607312 v8 / 7643 -310 15 20. Purchase for Public Use. Seller and Buyer acknowledge that the purchase and sale of the Property has been negotiated under the threat of condemnation. This is a non - displacement purchase; the purchase is subject to the Lease with the existing tenant, Frozen Foods Express. The property is under consideration for use as a public yard. Buyer has the power of eminent domain under California law to acquire property for such use, and Seller acknowledges Buyer may exercise such power if Buyer is unable to acquire the Property pursuant to the terms of this Agreement, whether by reason of a Seller default, failure of condition, or otherwise. 21. Possession. Seller shall surrender possession of the Property to Buyer as of the Close of Escrow, including all keys (if any) in Seller's possession and originals in Seller's possession of documents delivered hereunder. 22. Intentionally Omitted. 23. Drainage. Buyer will construct its project such that drainage will be directed away from the Property and shall otherwise comply with the drainage requirements which are a part of the Buyer Covenants. 24. Attorneys' Fees. In any action or proceeding between the parties hereto seeking the enforcement of any of the terms and provisions of this Agreement, or in connection with the Property or the Escrow, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, and reasonable attorneys' fees. 25. Survival. Without limiting any provisions of this Agreement expressly stated to survive the Close of Escrow, Sections 6.02. 6.03. 10, 11. 14 (for 365 days as provided in said section) 16, 17, 18, 23 and 24 shall survive the Close of Escrow and shall not merge into the Grant Deed upon the delivery or recordation thereof. 26. Party Representation. Both parties are represented by legal counsel in connection with the transaction contemplated by this Agreement. 27. Governing Law. The validity, construction and operational effect of this Agreement shall be governed by the laws of the State of California without regard to the conflict of laws provisions of such state. Venue for any action or other proceeding between Seller and Buyer concerning this Agreement shall be in the state courts of Los Angeles County, but outside the City of Downey. 28. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of permitted successors and assigns of the parties hereto. 29. Prior Agreements. This Agreement supersedes any and all oral or written agreements between the parties hereto regarding the Property which are prior in time to this Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. Neither Buyer nor Seller shall be bound by any prior understanding, agreement, promise, representation or stipulation, express or implied, not specified herein. S &F00607312 v8 / 7643 -310 16 30. Further Assurances. Buyer and Seller agree to execute all documents and instruments reasonably required in order to consummate the purchase and sale herein contemplated. 31. Severabilitv. If any portion of this Agreement is held to be unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect. 32. Amendments. This Agreement may be amended only by written agreement signed by both of the parties hereto. 33. Time of the Essence. Time and each of the terms, covenants, conditions and contingencies of this Agreement are hereby expressly made of the essence. 34. Counterparts. This Agreement may be executed in several counterparts and all such executed counterparts shall constitute one agreement, notwithstanding that all of the parties hereto are not signatories to the original or to the same counterpart. 35. Signatures. Any party hereto may rely upon the facsimile signature, or the signature delivered electronically in pdf format, of any other party hereto as if the party executing any document had delivered an ink - signed original of such document. 36. Notices. All notices shall be in writing and sent to the respective party, with a copy to the designated agent or attorney, at the addresses facsimile numbers set forth in Part I together a duplicate delivered to the addresses of such recipients by overnight courier, by providing written notice to the other party. 37. Effective Date. The effective date of this Agreement shall be the date of the last signature to this Agreement. S&F00607312 v8 / 7643 -310 [Signature Page Follows] 17 IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the date set forth adjacent to their respective signatures. SELLER: INCO PROPERTIES, INC., a Washington corporation By: Date: Victor DiPietro, President CITY OF DOWNEY: Mayor Anne M. Bayer ATTEST: City Clerk Kathleen L. Midstokke APPROVED AS TO FORM: City Attorney An original fully executed copy of this Agreement has been received by the Escrow Holder this day of , 20_, and by the execution hereof the Escrow Holder hereby covenants and agrees to be bound by the terms of this Agreement. ESCROW HOLDER: Chicago Title Company Date: S &F00607312 v8 / 7643 -310 18 Date: Date: Date: By: Name: Title: Escrow Number: S &F00607312 v8 / 7643 -310 19 EXHIBIT "A" ALL THAT CERTAIN REAL PROPERTY SITUTATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 10, TOWNSHIP 3 SOUTH, RANGE 12 WEST, S.B.M., IN THE CITY OF DOWNEY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON THE MAP OF THE SOUTHWESTERN PORTION OF THE RANCHO SANTA GERTRUDES, RECORDED IN BOOK 1 PAGE 502 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EASTERLY LINE OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10, SAID LINE ALSO BEING THE CENTERLINE OF WOODRUFF AVENUE (100 FEET WIDE), WITH THE EASTERLY PROLONGATION OF THE CENTERLINE OF STEWART AND GRAY ROAD (80 FEET WIDE), AS SHOWN ON PARCEL MAP NO. 15573, RECORDED IN BOOK 186 PAGE 18, OF PARCEL MAPS, RECORDS OF SAID COUNTY, THENCE WESTERLY ALONG SAID EASTERLY PROLONGATION OF THE CENTERLINE OF, THE CENTERLINE OF, AND THE WESTERLY PROLOGATION OF THE CENTERLINE OF SAID STEWART AND GRAY ROAD AS SHOWN PER SAID PARCEL MAP 15573, SOUTH 89 DEGREES 52' 30" WEST 1322.43 FEET TO THE WESTERLY LINE OF SAID NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10; THENCE SOUTHERLY ALONG SAID WESTERLY LINE 216.58 FEET, MORE OR LESS, TO THE NORTHWESTERLY CORNER OF LAND GRANTED TO INCO EXPRESS, INC., A WASHINGTON CORPORATION, PER DOCUMENT NO. 5, RECORDED ON JULY 29, 1976, O.R., SAID NORTHWESTERLY CORNER BEING THE TRUE POINT OF BEGINNING; THENCE EASTERLY, ALONG THE NORTHERLY LINE SAID LAND GRANTED TO INCO EXPRESS, NORTH 89 DEGREES 51' 31" EAST 300.51 FEET; THENCE LEAVING SAID NORHTERLY LINE, SOUTH 00 DEGREES 02' 21" WEST 162.05 FEET; THENCE SOUTH 89 DEGREES 51' 31" WEST 300.07 FEET, MORE OR LESS, TO SAID WESTERLY LINE OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10; THENCE NORTHERLY, ALONG SAID WESTERLY LINE, NORTH 00 DEGREES 07' 02" WEST 162.05 FEET TO THE TRUE POINT OF BEGINNING. SAID PROPERTY CONTAINS 48,661.23 SQUARE FEET, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "B" ATTACHED HERETO, AND BY REFERENCE, MADE A PART HEREOF. Portion of Assessor Parcel Number: 6284 -024 -025 All that certain real property situated in the City of Downey County of Los Angeles, State of California, described as follows: Parcel 1: Parcel 2: EXHIBIT "A" That portion of the Southeast quarter of the Northeast quarter of Section 10, Township 3 South, Range 12 West, in the City of Downey, as shown upon a map of the Southwestern portion of the Rancho Gertrudes, recorded in Book 1, Page 502 of Miscellaneous Records in the Office of the County Recorder of said County described as follows: Beginning at a point in the Westerly line of the Southeast quarter of the Northeast quarter of said Section 10 that is distant thereon South 0 07' 25" East 99.00 feet from the Northwest corner of the Southeast quarter of the Northeast quarter of said Section; thence parallel with the Northerly line of said quarter - quarter section North 89 51' 45" East 114.63 feet to a point designated for description purposes as Point A; thence continuing North 89 51' 45" East 55.37 feet; thence parallel with said Westerly line South 0 07' 25" East 40.00 feet to the true point of beginning; thence parallel with said Northerly line South 89 51' 45" West 55.36 feet to the beginning of a tangent curve concave Northerly and having a radius of 2040 feet (a radial line from said point of beginning passes through said Point A); thence Westerly along said curve through a central angle of 3 13' 17" an arc distance of 114.70 feet to said Westerly line; thence thereon South 0 07' 25" East 129.82 feet to the Southern Pacific Railroad Company recorded December 13, 1946 as Instrument No. 796 in Book 28932, Page 167 of Official Records in the Office of the County Recorder; thence North 89 50' 45" East 170.00 feet to a line parallel with said Westerly line which passes through the true point of beginning; thence along said parallel line North 0 07' 25" West 126.53 feet to the true point of beginning. That portion of the West 170.00 feet of the Southeast quarter of the Northeast quarter of Section 10, Township 3 South, Range 12 West, S.B.B. & M., in the Rancho Santa Gertrudes, in the City of Downey, County of Los Angeles, State of California, included within a strip of land, 50 feet wide, lying 25 feet on each side of the following described center line: Beginning at a point in the East line of said Section 10, distant South 0 05' 50" East, thereon, 290.20 feet from the Northeasterly corner of said Southeast quarter of the Northeast quarter of said Section; thence South 89 51' 29" West, 1322.35 feet to a point in the Westerly line of said Southeast quarter, distant Southerly thereon 290.58 feet for the Northwesterly corner of said Southeast quarter of the Northeast quarter of Section 10, the side lines of said strip of land to be lengthened or shortened to terminate in said Easterly and Westerly lines. Except therefrom that portion thereof lying below a depth of 500 feet, measured vertically, from the contour of the surface of said property; however, Grantor or its successors and assigns shall not have the right for any purpose whatsoever to enter upon, into or through the surface of said property or any part thereof Tying between said surface and 500 feet below said surface as reserved by Southern Pacific Transportation Company, a Delaware corporation in deed recorded April 30, 1980 as Instrument No. 80- 433274 of Official Records. Assessor's Parcel Number: 6284 - 024 - 027 A PORTION OF 11929 WOODRUFF AVBIV. E - DOWAEY, CA 90241 E ENG A PORTION OF 77E SE 1/4 OF 775E PE 1/4 OF WC7K.W k T. S 3, R 12 W, Sit, /V 77E CITY OF DOWAEY, COUNTY OF LOS AN( .E4 STATE OF CALFO NIA "fr uy 939.16' 28A64' EXHIBIT "A 1" CENTERLWE OF S1EMGART AHD GRAY AS SHOWN 1 01V PARCEL MAP Na 15573 PAS 188/1 S TEWART AND GRAY N 89'52W E 9 ,,fsr/ 9 7 r c�rs SE,' 1/4, - F A.P.M 6284- 024 -026 It .A�'A�..1'S2B6 Sd _ 3, T.P.O. B . 2 JO'AHAWQ�D SPRR 735, Ri7 wvx 6284-024-900 7 irfhf l 5(ir / /1 AREA 4q,661.23 t§ N 8931 E 300.07' OF SEC 10. T. 3 £ C R 12 W, 7S8.M SE 1/4 132243' _ AY LINE OF 7NE PE 1/4 OF NE SE 1/4 f• OF SE0. 10. T 3 S, R 12 W, £&AL A.P.N. W 1 8 WOODRUFF AVENUE 6284- 024 -028 P. d.B. 17715' sOFESS/ ROBERT G. %. MARTINEZ P.L.S. 6966 Exp. 9-30-1 9nc' OF CALIF c*! 0 CD 1. Opening of Escrow. Escrow Holder shall open Escrow as soon as reasonably possible upon receipt of a fully executed original of this Agreement and the Total Deposit ( "Opening of Escrow "). 2. Delivery bv Escrow. EXHIBIT B Escrow Instructions A. Confirmation. Upon the Opening of Escrow, Escrow Holder shall deliver written confirmation of the date of the Opening of Escrow to Seller and Buyer at the addresses set forth in Part I, Section 1, above, of this Agreement. B. Title Commitment. Upon Opening of Escrow, Escrow Holder shall cause a title commitment to be prepared and issued to Buyer together with a legible copy of all supporting documents referenced therein and a map plotting the location of all recorded easements (collectively referred to as the "TC "). C. Rent Statement. If Buyer notifies Escrow Holder that Seller has not timely provided the information list and/or Estoppel Certificates required in Section 12 of the Agreement, Escrow Holder shall deliver to Seller a form of Rent Statement and Seller shall complete the Rent Statement and deliver the completed form to Escrow Holder within 7 days of Seller's receipt of the form of Rent Statement. D. Closing Statement. Within two days of Buyer's or Seller's written request for a pro forma closing statement, Escrow Holder shall deliver to Seller and Buyer a pro forma closing statement which shall set forth, in a manner satisfactory to Seller and Buyer, the prorations and other credits and debits contemplated by this Agreement. 3. Documents and Funds Delivered to Escrow. All executed originals of the instruments identified in this Section 3 shall be delivered to and held by Escrow Holder through Close of Escrow and after Close of Escrow all originals shall be delivered to Buyer. The following shall be provided by Escrow Holder and delivered into the Escrow in connection with the transfer of the Property: A. Delivery bv Seller. Within seven days of Escrow Holder's delivery of the following, Seller shall deposit into Escrow: (i) 1 original grant deed (the "Grant Deed ") to the Property in recordable form, duly executed by Seller and acknowledged and in substantially the same form as set forth in Exhibit "D" attached hereto; (ii) 1 original of an assignment and assumption of contracts (the "Contracts Assignment "), duly executed in counterpart by Seller, assigning to Buyer Seller's interest and rights in all Contracts in substantially the same form as set forth in Exhibit "E" attached hereto; S &F00607312 v8 / 7643 -310 23 (iii) an affidavit ( "Owner's Affidavit ") duly executed by Seller in substantially the same form as set forth in attached Exhibit "F ", or such other form as may be acceptable to Title Company; (iv) 1 original, completed Rent Statement if Seller has not timely provided the information and /or Estoppel Certificates required in Section 12D and 12E, respectively, of the Agreement; (v) 1 original of an assignment and assumption of leases (the "Lease Assignment "), duly executed in counterpart by Seller in the form attached in Exhibit I attached hereto; (vi) 1 original of an easement and maintenance agreement (the "Easement Agreement "), duly executed in counterpart by Seller in the form attached hereto as Exhibit J; and (vii) such other instruments and documents as may be reasonably requested by Escrow Holder or otherwise required to transfer the Property to Buyer, including, but not limited to, any documents required by the Internal Revenue Service. B. Delivery bv Buyer in Escrow. Within 7 days of Escrow Holder's delivery of the following, Buyer shall deposit into Escrow: (i) 1 original of the Lease Assignment, duly executed in counterpart by Buyer, assuming Seller's interest and obligations as lessor under the Leases; (ii) 1 original of the Contracts Assignment duly executed in counterpart by Buyer, assuming Seller's interest and obligations under the Contracts; (iii) 1 original Certificate of Acceptance, duly executed by Buyer, in substantially the form of Exhibit "G" attached hereto (the "Certificate of Acceptance "); (iv) 1 original of the Memorandum of Right of First Refusal in recordable form, duly executed by Seller and acknowledged; (v) 1 original of the Easement Agreement, duly executed in counterpart by Buyer; and (vi) such other instruments and documents as may be reasonably requested by Escrow Holder or otherwise required to transfer the Property to Buyer. Notwithstanding anything to the contrary set forth in this Agreement, Buyer shall not be obligated to execute and deliver the Certificate of Acceptance until Buyer has received satisfactory evidence of Seller's delivery to Escrow Holder of the Grant Deed duly executed by Seller, acknowledged and recordable form. C. Further Delivery bv Buyer in Escrow. Buyer shall deposit into Escrow the remaining portion of the Purchase Price, plus additional sums as shall be necessary to pay the expenses payable by Buyer hereunder so long as the following conditions precedent have been satisfied: (a) Seller has fully performed its obligation under this Agreement; (b) Buyer has not exercised its rights to terminate this Agreement, as S &F00607312 v8 / 7643 -310 24 specifically set forth in this Agreement, prior to the expiration of the Due Diligence Period; (c) Escrow Holder has previously notified Buyer that Seller has delivered into Escrow all of its documents required under Section 3.A, above and (d) Escrow Holder has previously notified Buyer that Escrow Holder is able to proceed to close Escrow in accordance with the terms of this Agreement. 4. Conditions to Close. A. Buyer. Escrow shall not close unless and until the following conditions precedent and contingencies have been satisfied or waived in writing by Buyer: (i) All conditions and contingencies described in Section 9 of this Agreement have either been satisfied or waived in writing by Buyer; (ii) All funds and instruments described in Section 3.A of this Exhibit B have been delivered to the Escrow Holder; (iii) On the Closing Date, Seller shall not be in material default in the performance of any covenant or agreement to be performed by Seller under this Agreement; (iv) Title Company shall be in a position to, and shall concurrently with the transfer of the Property, issue to Buyer the title Policy in accordance with Section 6 of this Exhibit B; and (v) On the Closing Date, all representations and warranties made by Seller in this Agreement shall, subject to the terms of the Agreement, be materially true and correct as if made on and as of the Closing Date. B. Seller. Escrow shall not close unless and until the following conditions precedent and contingencies have been satisfied or waived in writing by Seller. (i) All funds and instruments described in this Section 3.B of this Exhibit B have been delivered to the Escrow Holder. (ii) On the Closing Date, Buyer shall not be in default in the performance of any material covenant or agreement to be performed by Buyer under this Agreement; and (iii) On the Closing Date, all representations and warranties made by Buyer in this Agreement shall be materially true and correct as if made on and as of the Closing Date. C. Escrow Holder. Escrow shall not close unless and until Escrow Holder commits to issuing an owner's policy of title insurance in the amount of the Purchase Price insuring that title to the Property is vested in Buyer, subject only to those exceptions to title that Buyer approved during the Due Diligence Period, and containing such title endorsements and such other coverage as Buyer may request (the "Title Policy "). S&F00607312 v8 / 7643 -310 25 5. Duties of Escrow Holder. Upon satisfaction of the conditions set forth in Section 4 of this Exhibit B above, Escrow Holder shall: A. Cause the Grand Deed (with the Certificate of Acceptance attached), the Memorandum of Right of First Refusal and the Easement Agreement each to be recorded (in the aforementioned order) in the Official Records of Los Angeles County, California. B. Deliver to (a) Buyer at least, the Contracts Assignment, and at least one conformed copy of the recorded Grant Deed, and at least one conformed copy of the recorded Easement Agreement , (b) Seller at least 1 fully executed original of the Owner's Affidavit, the Contracts Assignment, and at lease one conformed copy of the recorded Grant Deed, and at least one conformed copy of the recorded Easement Agreement and (c) the parties entitled thereto any other closing documents. C. Deliver to Buyer 1 original and 2 copies of the Title Policy. D. Disburse all funds deposited with Escrow Holder by Buyer as follows: (i) deduct the amount of all items (if any) chargeable to the account of Seller pursuant hereto; (ii) deliver to Seller the Purchase Price (less amounts deducted per Section D (i) above) pursuant to instructions to be delivered by Seller to Escrow Holder; (iii) deduct the amounts of all if any chargeable to Buyer; and (iv) disburse the remaining balance of the funds deposited by Buyer (including the Total Deposit) to Seller promptly upon the Close of Escrow pursuant to instructions to be delivered by Buyer to Escrow Holder. E. Escrow Holder shall be responsible for reporting this transaction to the Internal Revenue Service (the "IRS ") using an IRS Form 1099 -S Designation Agreement. 6. Escrow Fee. Escrow Holder shall charge Buyer for Escrow Holder's fees and costs, the title premium attributable to the Title Policy, document recording charges (if any), and all other customary expenses incident to transfer title to Buyer (the "Escrow Fee "). Escrow Holder shall be deemed to have earned the payment of the Escrow Fee upon satisfaction of Sections 4 and 5 of this Exhibit B and, within 15 days of the Close of Escrow, delivery to Buyer of a closing binder containing at a minimum those documents required in Sections 5B and 5C of this Exhibit B. S&F00607312 v8 / 7643 -310 26 "Property" address: "Premises ": Suite or Unit No. EXHIBIT "C" Estoppel Certificate By Tenant The undersigned ( "Tenant ") is a tenant of the Property, identified above, and possesses and occupies the Premises, identified above, pursuant to a lease dated (the "Lease "), by and between ( "Landlord ") and Tenant. The undersigned hereby certifies to the CITY OF DOWNEY ( "City "), the following: 1. The Lease is presently in full force and effect, and an executed copy of the Lease is attached hereto as ATTACHMENT 1. 2. The Lease has not been modified, amended, supplemented or assigned except as follows: and an executed copy of each modification, amendment, supplement or assignment is attached hereto as ATTACHMENT 2. 3. The Lease, as may have been modified, amended, supplemented or assigned, represents the entire agreement between Landlord and Tenant with respect to the Premises. 4. The commencement date of the Lease was Tenant began occupying the Premises on The expiration date of the Lease is 5. Tenant began paying rent on The current minimum monthly rent paid is $ The current minimum common area maintenance charges paid is $ The current real estate taxes paid is $ Tenant has not made any advance rent or other advance payment under the Lease. 6. Tenant submitted a security deposit in the amount of $ 7. Tenant has no option to renew or extend the term of the Lease except as follows: If said option is not contained in the Lease, an executed copy of the grant of said option is attached hereto as ATTACHMENT 3. 8. Tenant has no option to acquire any fee interest to any portion of the Property, except as follows: If said option is not contained in the Lease, an executed copy of the grant of said option is attached hereto as ATTACHMENT 4. 9. The address for notice to Tenant is: Name: S&F00607312 v8 / 7643 -310 27 to Landlord on Address: Attention: 10. Tenant has accepted possession of the Premises and any improvements required to be made by Landlord to the Premises by the terms of the Lease and all other conditions of the Lease to be satisfied by Landlord as of the date of this Estoppel Certificate have been completed or satisfied to the satisfaction of Tenant. Both Landlord and Tenant have complied with all required conditions precedent to such acceptance and possession. 11. To the best of Tenant's actual knowledge and as of the date of this Estoppel Certificate, Tenant has no right or claim of deduction, charge, lien or offset against Landlord under the Lease or otherwise against the rents or other charges due or to become due pursuant to the terms of said Lease except as follows: 12. To the best of Tenant's actual knowledge and as of the date of this Estoppel Certificate, Landlord and Tenant are not in default or breach of the Lease. 13. This Estoppel Certificate shall be binding upon the undersigned and his /her /its respective successors and assigns. Dated: Dated: Name: S&F00607312 v8 / 7643 -310 Name: Title: 28 Tenant: RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Downey 11111 Brookshire Avenue Downey, California 90241 Attn: Desi Alvarez MAIL TAX STATEMENTS TO: Same as above Recording of this document is fee - exempt under Government Code Section 6103. No Documentary Transfer Tax is due on this document pursuant to Revenue and Taxation Code Section 11922. Dated: S&F00607312 v8 / 7643 -310 EXHIBIT D Forrn of Grant Deed GRANT DEED Assessor's Parcel Number: 6284 - 024 -027 and a portion of 6284- 024 -025 FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the undersigned, ( "Grantor "), hereby grants to the CITY OF DOWNEY, a municipality duly organized and existing under the laws of the State of California ( "Grantee "), that certain real property in the City of Downey, County of Los Angeles, State of California described in Exhibit A attached hereto and incorporated herein, together with all buildings and improvements located thereon (the "Property"), subject to all matters of record and to all laws, regulations, restrictions and ordinances. [Signatures] [EXHIBIT ONLY] MAIL TAX STATEMENTS AS SET FORTH ABOVE 29 EXHIBIT "A" ALL THAT CERTAIN REAL PROPERTY SITUTATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 10, TOWNSHIP 3 SOUTH, RANGE 12 WEST, S.B.M., IN THE CITY OF DOWNEY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON THE MAP OF THE SOUTHWESTERN PORTION OF THE RANCHO SANTA GERTRUDES, RECORDED IN BOOK 1 PAGE 502 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EASTERLY LINE OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10, SAID LINE ALSO BEING THE CENTERLINE OF WOODRUFF AVENUE (100 FEET WIDE), WITH THE EASTERLY PROLONGATION OF THE CENTERLINE OF STEWART AND GRAY ROAD (80 FEET WIDE), AS SHOWN ON PARCEL MAP NO. 15573, RECORDED IN BOOK 186 PAGE 18, OF PARCEL MAPS, RECORDS OF SAID COUNTY, THENCE WESTERLY ALONG SAID EASTERLY PROLONGATION OF THE CENTERLINE OF, THE CENTERLINE OF, AND THE WESTERLY PROLOGATION OF THE CENTERLINE OF SAID STEWART AND GRAY ROAD AS SHOWN PER SAID PARCEL MAP 15573, SOUTH 89 DEGREES 52' 30" WEST 1322.43 FEET TO THE WESTERLY LINE OF SAID NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10; THENCE SOUTHERLY ALONG SAID WESTERLY LINE 216.58 FEET, MORE OR LESS, TO THE NORTHWESTERLY CORNER OF LAND GRANTED TO INCO EXPRESS, INC., A WASHINGTON CORPORATION, PER DOCUMENT NO. 5, RECORDED ON JULY 29, 1976, O.R., SAID NORTHWESTERLY CORNER BEING THE TRUE POINT OF BEGINNING; THENCE EASTERLY, ALONG THE NORTHERLY LINE SAID LAND GRANTED TO INCO EXPRESS, NORTH 89 DEGREES 51' 31" EAST 300.51 FEET; THENCE LEAVING SAID NORHTERLY LINE, SOUTH 00 DEGREES 02' 21" WEST 162.05 FEET; THENCE SOUTH 89 DEGREES 51' 31" WEST 300.07 FEET, MORE OR LESS, TO SAID WESTERLY LINE OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10; THENCE NORTHERLY, ALONG SAID WESTERLY LINE, NORTH 00 DEGREES 07' 02" WEST 162.05 FEET TO THE TRUE POINT OF BEGINNING. SAID PROPERTY CONTAINS 48,661.23 SQUARE FEET, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "B" ATTACHED HERETO, AND BY REFERENCE, MADE A PART HEREOF. Portion of Assessor Parcel Number: 6284 - 024 -025 All that certain real property situated in the City of Downey County of Los Angeles, State of California, described as follows: Parcel 1: Parcel 2: EXHIBIT "A" That portion of the Southeast quarter of the Northeast quarter of Section 10, Township 3 South, Range 12 West, in the City of Downey, as shown upon a map of the Southwestern portion of the Rancho Gertrudes, recorded in Book 1, Page 502 of Miscellaneous Records in the Office of the County Recorder of said County described as follows: Beginning at a point in the Westerly line of the Southeast quarter of the Northeast quarter of said Section 10 that is distant thereon South 0 07' 25" East 99.00 feet from the Northwest corner of the Southeast quarter of the Northeast quarter of said Section; thence parallel with the Northerly line of said quarter - quarter section North 89 51' 45" East 114.63 feet to a point designated for description purposes as Point A; thence continuing North 89 51' 45" East 55.37 feet; thence parallel with said Westerly line South 0 07' 25" East 40.00 feet to the true point of beginning; thence parallel with said Northerly line South 89 51' 45" West 55.36 feet to the beginning of a tangent curve concave Northerly and having a radius of 2040 feet (a radial line from said point of beginning passes through said Point A); thence Westerly along said curve through a central angle of 3 13' 17" an arc distance of 114.70 feet to said Westerly line; thence thereon South 0 07' 25" East 129.82 feet to the Southern Pacific Railroad Company recorded December 13, 1946 as Instrument No. 796 in Book 28932, Page 167 of Official Records in the Office of the County Recorder; thence North 89 50' 45" East 170.00 feet to a line parallel with said Westerly line which passes through the true point of beginning; thence along said parallel line North 0 07' 25" West 126.53 feet to the true point of beginning. That portion of the West 170.00 feet of the Southeast quarter of the Northeast quarter of Section 10, Township 3 South, Range 12 West, S.B.B. & M., in the Rancho Santa Gertrudes, in the City of Downey, County of Los Angeles, State of California, included within a strip of land, 50 feet wide, lying 25 feet on each side of the following described center line: Beginning at a point in the East line of said Section 10, distant South 0 05' 50" East, thereon, 290.20 feet from the Northeasterly corner of said Southeast quarter of the Northeast quarter of said Section; thence South 89 51' 29" West, 1322.35 feet to a point in the Westerly line of said Southeast quarter, distant Southerly thereon 290.58 feet for the Northwesterly corner of said Southeast quarter of the Northeast quarter of Section 10, the side lines of said strip of land to be lengthened or shortened to terminate in said Easterly and Westerly lines. Except therefrom that portion thereof Tying below a depth of 500 feet, measured vertically, from the contour of the surface of said property; however, Grantor or its successors and assigns shall not have the right for any purpose whatsoever to enter upon, into or through the surface of said property or any part thereof lying between said surface and 500 feet below said surface as reserved by Southern Pacific Transportation Company, a Delaware corporation in deed recorded April 30, 1980 as Instrument No. 80- 433274 of Official Records. Assessor's Parcel Number: 6284 - 024 - 027 EXHIBIT 1.A 1" A PORTION OF 11929 WOODRUFF A VFME - DOW EY, CA 80241 BEING A PORTION OF TIE SE 1/4 OF TIE AE 1/4 OF . C770 N 14 T. 3 8. R 12 W, 8911, /V TIE QTY QF DOWNEY, CXWTY OF LOS ANGELES, STATE OF CALFORNIA CEN7ERUNE OF STEM+ART ANO GRAY AS 9101NY 1 ON PARCEL MAP NO. 15573, Y. 188/18 S P.a TEWART AND BRAY Ri•2000' 9178 18' ��� - 28884' N 8952W E 132243' R-2040 _ "fircx. // ; A.P.M 8284 - 024 -026 a f POF SE l l/4 SEr" XJ le4REA73a 15266 §M 3 T. P.O. B . Al I' J0• �8M1D SP.R.R 1 ) A.P.Nt 6284 -024 -900 \ i i % ifjgc 661.23 N 893) :NIT 30Q07' LNE OF 71E NE f/4 OF 7?f SE f/4 OF SEC, fQ T. 3 S, R 12 W, SS.AL EtY LU E OF THE NE f/4 OF 7NE SE 1/4 OF SEC. 10. T. 3 S. R 12 1K, Sl�AL Mibi WOODRUFF AVENUE 8284•024 -02$ P.O.8.- 177.13' STATE OF CALIFORNIA COUNTY OF On , 20_ before me, , a Notary Public in and for said County and State, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: } } S.S. (Notary Seal) ATTENTION NOTARY: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to another document. Title of Document Type: Number of Pages including notary acknowledgment Signors other than named above: Date of Document: S &F00607312 v8 / 7643 -310 31 EXHIBIT E Form of Contracts Assianment ASSIGNMENT AND ASSUMPTION OF CONTRACTS THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS is made by and between , a ( "Assignor ") and CITY OF DOWNEY, a municipality duly organized and existing under the laws of the State of California ( "Assignee "), with reference to the following facts: A. Assignor is bound by those certain service contracts, maintenance contracts, and other contracts and agreements currently in effect in connection with Assignor's operation and maintenance of the real property ( "Property") legally described on Exhibit "A" attached hereto, and the improvements constructed thereon, all of which contracts and agreements (the "Contracts ") are described in Exhibit "B" attached hereto and made a part hereof. B. Pursuant to the terms of that certain Agreement of Purchase and Sale and Escrow Instructions entered into by Assignor, as Seller, and Assignee, as Buyer (the "Purchase Agreement "), Assignor now desires to assign and transfer to Assignee all of its right, title and interest in the Contracts, subject to all of the payments, terms, covenants, obligations, agreements and restrictions therein set forth, and Assignee desires to accept said Approved Contracts, and be bound by the terms thereof. C. All capitalized but undefined terms used herein shall have the same meaning as set forth in the Purchase Agreement. NOW THEREFORE, in consideration of the mutual covenants and conditions hereinbelow set forth, it is agreed: 1. Effective as of the Close of Escrow, as that phrase is defined in the Purchase Agreement, Assignor assigns and transfers to Assignee and its successors and assigns, all of Assignor's right, title and interest in and to the Contracts, subject to the payments, terms, covenants, obligations, agreements and restrictions set forth therein. 2. Effective as of the Close of Escrow, Assignee accepts the assignment of the Approved Contracts, shall be entitled to all rights and benefits accruing to the Assignor thereunder and hereby assumes and agrees to be bound by the terms from and after the Close of Escrow. 3. This Assignment and Assumption may be executed in counterparts which taken together shall constitute one and the same instrument. 4. The provisions of this instrument shall be binding upon and inure to the benefit of Assignor and Assignee and their respective successors and assigns. S&F00607312 v8 / 7643 -310 32 5. Assignor hereby covenants that it will, at any time and from time to time, execute any documents and take such additional actions as Assignee or its successors or assigns shall reasonably require in order to more completely or perfectly carry out the transfer intended to be accomplished by this Assignment and Assumption. IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment and Assumption of Contracts as of the date set forth adjacent to their respective signatures. The effective date of this instrument shall be the last date set forth below. Dated: Dated: Dated: S&F00607312 v8 / 7643 -310 "ASSIGNOR" By: [EXHIBIT ONLY — DO NOT SIGN] Name: Title: By: [EXHIBIT ONLY — DO NOT SIGN] Name: Title: "ASSIGNEE" CITY OF DOWNEY By: [EXHIBIT ONLY — DO NOT SIGN] Name: Title: 33 ,a S&F00607312 v8 / 7643 -310 EXHIBIT "A" TO ASSIGNMENT AND ASSUMPTION OF CONTRACTS LEGAL DESCRIPTION 34 EXHIBIT "B" TO ASSIGNMENT AND ASSUMPTION OF CONTRACTS LIST OF CONTRACTS S&F00607312 v8 / 7643 -310 35 The undersigned hereby declares as follows: 1. That Declarant is the manager of , , a (the "Owner "), which is the owner of certain premises (the "Land ") described on Schedule A to that certain Commitment No. (the "Commitment ") issued by Chicago Title Insurance Company (the "Company "). 2. That during the period of six months immediately preceding the date of this declaration the Owner has caused no work to be done, no surveys (other than the placement of stakes) or architectural or engineering plans to prepared, and no materials to be furnished in connection with the erection, equipment, repair, protection or removal of any building or other structure by Owner on the Land or in connection with the improvement of the Land by Owner in any manner whatsoever. 3. That Owner has not previously conveyed the Land; is not a debtor in bankruptcy, and has not received written notice of any pending court action affecting the title to the Land. 4. That, to Declarant's knowledge, except as shown in the above - referenced Commitment, there are no unpaid or unsatisfied security deeds, mortgages, deeds of trust, Uniform Commercial Code financing statements, claims of lien, special assessments for sewage or street improvements, or taxes that constitute a lien against the Land or that affect the Land but have not been recorded in the public records. 5. That, to Declarant's knowledge, the following are all of the leases or other occupancy rights affecting the land: a) EXHIBIT F Form of Owner's Affidavit OWNER'S TITLE AFFIDAVIT 6. That, to Declarant's knowledge, there are no other persons or entities that assert an ownership interest in the Land, nor are there unrecorded easements, claims of easement, or boundary disputes that affect the Land. 7. That, to Declarant's knowledge, there are no outstanding options to purchase or rights of first refusal affecting the Land. 8. That this declaration is made with the intention that the Company and its policy issuing agents will rely upon it in issuing their title insurance policies and endorsements. 9. This Declaration is given by Declarant on behalf of Owner. In no event shall Declarant have any personal liability whatsoever with respect to this Declaration. 10. References to Declarant's knowledge (or similar phrases) contained in this Declaration shall refer only to the actual knowledge of and S &F00607312 v8 / 7643 -310 36 shall not be construed, by imputation or otherwise, to refer to the knowledge of any property manager, or to any other officer, agent, manager, representative or employee of Declarant, or to impose upon Declarant any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains. In no event shall Declarant have any personal liability whatsoever with respect to this Declaration. S&F00607312 v8 / 7643 -310 (Signature Page Follows) 37 Dated: [EXHIBIT ONLY — DO NOT SIGN] Name: Dated: [EXHIBIT ONLY — DO NOT SIGN] Name: S &F00607312 v8 / 7643 -310 Owner: 38 This is to certify that the interest in real property conveyed by the Grant Deed dated , 20_, from , as grantor to CITY OF DOWNEY, a municipality duly organized and existing under the laws of the State of California, as grantee, is hereby accepted by the undersigned officer on behalf of the City pursuant to authority conferred by resolution of its City Council adopted , 20_, and the City of Downey consents to the recordation thereof by its duly authorized officer. Dated: S&F00607312 v8 / 7643 -310 EXHIBIT G FORM OF CERTIFICATE OF ACCEPTANCE CERTIFICATE OF ACCEPTANCE CITY OF DOWNEY By: Name: Title: 39 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Silver & Freedman, APLC 2029 Century Park East; 19 Floor Los Angeles, CA 90067 Attention: Kenneth S. Fields, Esq. EXHIBIT H Memorandum of Riaht of First Refusal (Space Above Line for Recorder Use Only) MEMORANDUM OF RIGHT OF FIRST REFUSAL This Memorandum of Right of First Refusal (the "Memorandum "), dated as of is made by The City of Downey, California ( "Grantor ") for the benefit of Inco Properties, Inc., a Washington corporation ( "Grantee "). 1. Grantor's Property. Grantor owns that certain real property in the City of Downey, County of Los Angeles, State of California as set forth on Exhibit A hereto (the "Grantor's Property ") 2. Grantee's Property. Grantee owns that certain real property in the City of Downey, County of Los Angeles, State of California as set forth on Exhibit B hereto (the "Grantee's Property ") 3. Right of First Refusal. Grantor hereby grants to Grantee and its successors -in- interest to the Property which are either under the control of Grantee, controlled by Grantee or under common control with Grantee (the "Grantee Parties ") the right of first refusal to purchase the Grantor's Property for its then current fair market value, as determined by an MAI appraiser reasonably acceptable to both Grantor and Grantee. IN WITNESS WHEREOF, Grantor has executed this Memorandum as of the date first set forth above. CITY OF DOWNEY: Mayor Anne M. Bayer ATTEST: City Clerk Kathleen L. Midstokke APPROVED AS TO FORM: City Attorney S&F00607312 v8 / 7643 -310 40 State of California County of ) ) On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJLIRY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of ) ) On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California ) County of ) On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal S&F00607312 v8 / 7643 -310 41 EXHIBIT I Lease Assignment ASSIGNMENT AN ASSUMPTION O LESSOR'S INTEREST IN LEASE ("Assignor) hereby assigns and transfers to ("Assignee') the Interest of Ass!Rtnr under that certain Lease (the 'Lease) dated by and between , as Lessor, and as Leaeas, concerning the reel pcoerty commonly known se 2. Assignor also assigns to Assignee the security depoeh under said Lease in the sum of $ and the Interest al Lessor in sty amicable venality d odd Lease. 3. Thls Asegmsent shell be eRee*Me from end after the recordation, in the county where the Remleee are located. d the deed peeeirrg fee title to the Premi see to Assignee. Dated: ASSIGNOR Name Printed: Tide EV Neme Printed: Tine: ACCEPTANCE AND ASSUMPTION ("the "Promises). Assignee hereby accepts the atom Assignment end assumes all of the rights and obligations d the Lessor waiving horn and after the recordation, in are county where the Remises are boated. d the dead paedr® h. file to the Promises to Assignee- _ Asdgnee shall dolend, *emeriti. and hold Assignor harmless with respect to the ab(gadons of Laseor under said Lease accruing from and alter said date. Dated: ASSIGPSEE EN Nerve Printed: Tine: SY Name Printed: 1100: NOTICE: Thee forms ate open modified to meet charging requirements of law and industry roads. Always write or call to males sum you em udlioing the most aunent form: AIR Conutmtclsl Real Eetat.Asaoeiation, 600 W 6th Street Suite 600, lea Angeles. CA 00017. Telephone Ib. (213) 6674777. Fs No,: (213) 6(774616. PAGE 1 OF 1 c'1006• AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM 1A-1-12.08E S &F00607312 v8 / 7643 -310 44 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Silver & Freedman, APLC 2029 Century Park East, 19th Floor Los Angeles, CA 90067 Attention: Kenneth S. Fields, Esq. EXHIBIT J Easement Aa reement EASEMENT AND MAINTENANCE AGREEMENT THIS EASEMENT AND MAINTENANCE AGREEMENT (this "Agreement ") is entered into as of , 2010 by and between the City of Downey, California ( "Downev ") and Inco Properties, Inc., a Washington corporation ( "Inco " Inco and Downey are sometimes referred to individually as an "Owner" and collectively as t e 'Owners "), with reference to the following facts: RECITALS A. Inco is (or will be) the owner of certain real property (the "Inco Property ") located in the City of Downey, County of Los Angeles, State of California as more particularly described on Exhibit "A" attached hereto and incorporated by this reference herein; B. Downey is (or will be) the owner of certain real property (the "Downev Property ") located in the City of Downey, County of Los Angeles, State of California as more particularly described in Exhibit "B" attached hereto and incorporated by this reference herein. The Inco Property and the Downey Property are sometimes referred to individually as a "Property" and collectively as the "Properties "; C. One of the improvements on Inco's Property (the "Inco Building ") has a foundation (the "Foundation ") that is or may be partly situated in Easement Area A (as defined below) and Downey desires to grant Easement A (as defined below) for the uses set forth in this Agreement. D. Downey intends to construct a building on the Downey Property (the "Downev Building ") in an area adjacent) Easement Area B (as defined below) and Inco desires to grant Easement Bas defined below) for the uses set forth in this Agreement. Easement A and Easement B are sometimes referred to individually as an "Easement" and collectively as the "Easements ". Easement Area A and Easement Area B are sometimes referred to individually as an "Easement Area" and collectively as the "Easement Areas ". AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other ood and valuable consideration, the receipt and sufficiency of which are hereby acknowledge the Owners hereby agree as follows: 1. Establishment and Character of Easements. S&F00607312 v8 / 7643 -310 45 A. Downey hereby grants, demises, and conveys to Inco an easement for the benefit of the Inco Property upon, over, and under that portion of the Downey Property, as more particularly described on Exhibit "C" attached hereto and incorporated by this reference herein ( "Easement A "). The portion of the Downey Property which is burdened by Easement A is sometimes referred to herein as the "Easement Area A ". Easement A is appurtenant to, and for the benefit of, the Inco Property. Easement A shall (i) run with the Properties and be binding upon and inure to the benefit of all Owners of the Inco Property and the burden of all owners of the Downey Property and their respective heirs, executors, administrators, successors, and assigns, (ii) exist in perpetuity, notwithstanding any future acts by any person or entity (except if Easement A is deemed abandoned in accordance with applicable statutes) and (iii) at all times be subject to the provisions of this Agreement. B. Conditioned upon and upon) the completion of the Downey Building, Inco grants, demises, and conveys to Downey an easement for the benefit of the Downey Property upon, over, and under that portion of the Inco Property, as more particularly described on Exhibit "D" attached hereto and incorporated by this reference herein ( "Easement B "). The portion of the Inco Property which is burdened by Easement B is sometimes referred to herein as the "Easement Area B ". Easement B is appurtenant to, and for the benefit of, the Downey Property. Easement B shall (i) run with the Properties and be binding upon and inure to the benefit of all Owners of the Downey Property and the burden of all owners of the Inco Property and their respective heirs, executors, administrators, successors, and assigns, (ii) exist in perpetuity, notwithstanding any future acts by any person or entity (except if Easement B is deemed abandoned in accordance with applicable statutes), and (iii) at all times be subject to the provisions of this Agreement. 2. Use of Easements and Easement Areas. A. Easement A shall be for the use and benefit of the Owners of the Inco Property (i) to install, remove, maintain, repair and /or replace (at any time and from time to time) footings and other sub - surface support for the Foundation and /or the Inco Building (the "Inco Buildina Support") and (ii) to inspect, maintain, paint, repair and replace the Inco Building (the "Easement A Activities" ). Downey shall not (i) construct any improvements on Easement Area A nor (11) take any action which might damage the Foundation, the Inco Building Support, the Inco Building or otherwise impair Inco's ability to exercise its rights under this Agreement. Easement A is solely for the purpose of the Easement A Activities and shall not be used for any other purpose. Inco shall use commercially reasonable efforts to conduct the Easement A Activities on the Inco Property prior to conducting them in Easement Area A. B. Easement B shall be for the use and benefit of the Owners of the Downey Property to inspect, maintain, paint, repair and replace the Downey Building (the "Easement B Activities"). Inco shall not (i) construct any improvements on Easement Area B nor (11) take any action which might damage the Downey Building Support, the Downey Building or otherwise impair Downey's ability to exercise its rights under this Agreement. Easement B is solely for the purpose of the Easement B Activities and shall not be used for any other purpose. Downey shall use commercially reasonable efforts to conduct the Easement B Activities on the Downey Property prior to conducting them in Easement Area B. 3. Indemnity. a. Inco Indemnity. Inco shall indemnify, defend, and hold Downey harmless from and against any and all claims, demands, losses, liabilities, damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) arising out of any injury to or death of any person or damage to or destruction of property whic results directly from Inco's (i) entry onto Easement Area A during the exercise of its rights under this Agreement, (ii) exercise of its rights, or performance of its duties, under this Agreement, or (iii) breach of its obligations under this Agreement. For purposes of this Paragraph 3a, the actions or omissions of any agent or contractor of Inco shall be considered to be the actions or omissions of Inco. b. Downey Indemnity. Downey shall indemnify, defend, and hold Inco harmless from and against any and all claims, demands, losses, liabilities, damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) arising out of any injury 46 to or death of any person or damage to or destruction of property which results directly from Downey's (i) entry onto the Easement Area B, (ii) exercise of its rights, or performance of its duties, under this Agreement, or (iii) breach of its obligations under this Agreement. For purposes of this Paragraph 3b, the actions or omissions of any agent or contractor of Downey shall be considered to be the actions or omissions of Downey. 4. General Provisions. a. Protection of Mortgagees. No breach of the covenants, conditions, or restrictions contained herein shall affect, impair, defeat, or render invalid, the lien or charge of any duly mortgage or deed of trust encumbering any Property made in good faith and for value. Except as otherwise provided herein, all of the provisions of this Agreement shall be binding and effective against any person whose title to a Property is acquired by foreclosure, trustee's sale, or otherwise. b. Assignment. The rights, powers, and obligations conferred upon the parties to this Agreement shall not at any time be transferred or assigned except through a transfer of such parties' interest in all or a portion of its respective Property. Furthermore, upon the conveyance by a party of its entire interest in its Property, that party shall have no further obligation under this Agreement with respect to such Property which arise or accrue after the effective date of such conveyance, and such obligations shall be binding upon the successor in interest to such party. The term "Owner(s)", as used herein, shall include the original parties to this Agreement, and their respective permitted successors, assigns, heirs, administrators, and executors. c. Entire Agreement. This Agreement constitutes the entire agreement between the parties relating to the matters set forth herein. Neither party has made any representation or warranty to the other which is not contained herein. Absolutely no right, title, or interest in or to any portion of the Owner's respective Property is granted or otherwise given to the other Owner, except those rights in and to the Easement as are specifically set forth herein. d. Attorneys' Fees. In any action or proceeding between the parties hereto seeking the enforcement of any of the terms and provisions of this Agreement, or in connection with the Properties the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, and reasonable attorneys' fees. e. Notices. All notices under this Agreement shall be in writing and shall be sent to the respective party, by overnight courier, and effective upon delivery or refusal of delivery. All notices given hereunder shall be sent addressed to the party to whom notice is being given at the Property owned by said party, or at such other address as any party may notify the other, in writing, from time to time. f. Further Assurances. Each Owner agrees to execute any and all documents and writings which may be necessary or expedient to, and do such other acts as will, further the purposes hereof. g. Authority. Each individual executing this Agreement represents and warrants that he or she is duly authorized to execute and deliver this Agreement and that this Agreement is binding upon the party for which such individual is executing. h. Governing Law. The validity, construction and operational effect of this Agreement shall be governed by the laws of the State of California without regard to the conflict of laws provisions of such state. Venue for any action or other proceeding between Seller and Buyer concerning this Agreement shall be in the state courts of Los Angeles County, but outside the City of Downey. Interpretation. This Agreement is to be deemed to have been prepared jointly by the parties hereto and if any inconsistencies exist herein they shall not be interpreted or construed against any party as the drafter. Prior drafts shall not be used for the purposes of interpreting the provisions of this Agreement. j. Severabilitv. If any provision of this Agreement is adjudicated to be void, illegal, invalid, or unenforceable, the remaining terms and provisions of this Agreement shall not be affected thereby, and each of such remaining terms and provisions of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 47 k. Captions. All captions and headings herein are for convenience and ease of reference only, and shall not be used or referred to in any way in connection with the interpretation or enforcement of this Agreement. I. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which, together, shall constitute a single agreement. The signature page of any one counterpart copy may be removed therefrom and attached to another counterpart copy in order to create one complete Agreement. [Signature Page Follows] 48 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. INCO PROPERTIES, INC., a Washington corporation By: Victor DiPietro, President CITY OF DOWNEY: Mayor Anne M. Bayer ATTEST: City Clerk Kathleen L. Midstokke APPROVED AS TO FORM: City Attorney 49 State of California County of On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of ) ) ) ) On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 50 State of California County of ) ) On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of ) ) On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 51 EXHIBIT "C" to EXHIBIT "J" "EASEMENT AREA A" AN EASEMENT FOR MAINTENANCE PURPOSES OVER ALL THAT CERTAIN REAL PROPERTY SITUTATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 10, TOWNSHIP 3 SOUTH, RANGE 12 WEST, S.B.M., IN THE CITY OF DOWNEY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON THE MAP OF THE SOUTHWESTERN PORTION OF THE RANCHO SANTA GERTRUDES, RECORDED IN BOOK 1 PAGE 502 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EASTERLY LINE OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10, SAID LINE ALSO BEING THE CENTERLINE OF WOODRUFF AVENUE (100 FEET WIDE), WITH THE EASTERLY PROLONGATION OF THE CENTERLINE OF STEWART AND GRAY ROAD (80 FEET WIDE), AS SHOWN ON PARCEL MAP NO. 15573, RECORDED IN BOOK 186 PAGE 18, OF PARCEL MAPS, RECORDS OF SAID COUNTY, THENCE WESTERLY ALONG SAID EASTERLY PROLONGATION OF THE CENTERLINE OF, THE CENTERLINE OF, AND THE WESTERLY PROLOGATION OF THE CENTERLINE OF SAID STEWART AND GRAY ROAD AS SHOWN PER SAID PARCEL MAP 15573, SOUTH 89 DEGREES 52' 30" WEST 1322.43 FEET TO THE WESTERLY LINE OF SAID NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10; THENCE SOUTHERLY ALONG SAID WESTERLY LINE 216.58 FEET, MORE OR LESS, TO THE NORTHWESTERLY CORNER OF LAND GRANTED TO INCO EXPRESS, INC., A WASHINGTON CORPORATION, PER DOCUMENT NO. 5, RECORDED ON JULY 29, 1976, O.R.; THENCE EASTERLY, ALONG THE NORTHERLY LINE SAID LAND GRANTED TO INCO EXPRESS, NORTH 89 DEGREES 51' 31" EAST 300.51 FEET, TO THE TRUE PONT OF BEGINNING; THENCE LEAVING SAID NORHTERLY LINE, SOUTH 00 DEGREES 02' 21" WEST 162.05 FEET; THENCE SOUTH 89 DEGREES 51' 31" WEST 10.00 FEET, THENCE NORTHERLY NORTH 00 DEGREES 07' 02" WEST 162.05 FEET TO SAID NORTHERLY LINE GRANTED TO INCO EXPRESS; THENCE NORTH 89 DEGREES 51' 31" EAST 10.00 FEET, TO TRUE POINT OF BEGINNING. SAID EASEMENT CONTAINS 1,620.47 SQUARE FEET, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "B" ATTACHED HERETO, AND BY REFERENCE, MADE A PART HEREOF. EXHIBIT "B» A 1190 FOOT ME EASEfEVT FOR MANTEIUMGE PIRPOSES OVER A A POM41»V OF 11929 WOO IRLFF A VHK,E - DOWAEY,, CA 90241 BEAKS A PIOIRT7ON OF ThE SE 1/4 OF TIE NE 1/4 OF SEC711 W k T. 3 8, R 1Z W, Salt, N TIE 07)' OF DOIMIEY, COUNTY OF LOS ANGE E'4 STATE OF CALFORMA CE7V7ERLI* OF SMART AND GRAY AS SHOW ON PARCEL MAP NQ 15573, P.ALQ 186/18 p� =WART AND CRAY R*,20oo' 1 _ l 114.63' -�' 9,39:16' - `� — — — — N 8974230' E 1322.43' 1 =1 rg N t 4 t,. N 8932 30' E v 5X' I3 A.P.M 8284 - 024 -027 e P R, SE 1/4, 13 AIL' i/4, SEC 1. g $ a — 89'5131 E S 300161' - — — T35, a R ,(r� W N 8931'31 E U N 8931 E 170.07' A.P.N. 6284- 024 - 900 18 LpE OF THE PE 1/4 OF THE SE 1/4 OF SEC: 10. T. 3 S. R 12 W. SBA1. Ell" LINE OF 741E NE 1/4 OF 77E SE 1/4 OF SEC: 18. T. 3 5., 12 W. &&M A.P.K 6284- 024 -026 N59'51'31' iQ00• A.P.N. 50' ABANDONED SP.RR marreberer SBM :� o.o• DIST. PAM T.P.O.B. SCALE 268.64' 6284 -024 -025 N 1:1811 P.O.B. 177.15' ROBERT G. MARTINEZ P.L.S. 6966 Exp. 9 -30-1 n7 A 8 EXHIBIT "D" TO EXHIBIT "J" "EASEMENT AREA B" AN EASEMENT FOR MAINTENANCE PURPOSES OVER ALL THAT CERTAIN REAL PROPERTY SITUTATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 10, TOWNSHIP 3 SOUTH, RANGE 12 WEST, S.B.M., IN THE CITY OF DOWNEY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON THE MAP OF THE SOUTHWESTERN PORTION OF THE RANCHO SANTA GERTRUDES, RECORDED IN BOOK 1 PAGE 502 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EASTERLY LINE OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10, SAID LINE ALSO BEING THE CENTERLINE OF WOODRUFF AVENUE (100 FEET WIDE), WITH THE EASTERLY PROLONGATION OF THE CENTERLINE OF STEWART AND GRAY ROAD (80 FEET WIDE), AS SHOWN ON PARCEL MAP NO. 15573, RECORDED IN BOOK 186 PAGE 18, OF PARCEL MAPS, RECORDS OF SAID COUNTY, THENCE WESTERLY ALONG SAID EASTERLY PROLONGATION OF THE CENTERLINE OF, THE CENTERLINE OF, AND THE WESTERLY PROLOGATION OF THE CENTERLINE OF SAID STEWART AND GRAY ROAD AS SHOWN PER SAID PARCEL MAP 15573, SOUTH 89 DEGREES 52' 30" WEST 1322.43 FEET TO THE WESTERLY LINE OF SAID NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10; THENCE SOUTHERLY ALONG SAID WESTERLY LINE 216.58 FEET, MORE OR LESS, TO THE NORTHWESTERLY CORNER OF LAND GRANTED TO INCO EXPRESS, INC., A WASHINGTON CORPORATION, PER DOCUMENT NO. 5, RECORDED ON JULY 29, 1976, O.R.; THENCE EASTERLY, ALONG THE NORTHERLY LINE SAID LAND GRANTED TO INCO EXPRESS, NORTH 89 DEGREES 51' 31" EAST 300.51 FEET; THENCE LEAVING SAID NORHTERLY LINE, SOUTH 00 DEGREES 02' 21" WEST 162.05 FEET TO THE TRUE PONT OF BEGINNING; THENCE SOUTH 89 DEGREES 51' 31" WEST 300.04 FEET, TO SAID WESTERLY OF THE NE 1 /4 OF THE SE 1 /4 OF SECTION 10, T. 3 S., R. 12 W., S.B.M.; THENCE NORTHERLY ALONG SAID WESTERLY LINE, NORTH 00 DEGREES 07' 02" WEST 10.00 FEET; THENCE NORTH 89 DEGREES 51' 31" EAST 300.07 FEET, TO TRUE POINT OF BEGINNING. SAID EASEMENT CONTAINS 3,000.57 SQUARE FEET, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "8" ATTACHED HERETO, AND BY REFERENCE, MADE A PART HEREOF. A 2200 FOOT ME EASEMENT FOR MAINTENANCE PURPOSES OVER A A PORTION OF 11520 WOODRUFF A VEME - DOWAEY, CA 90241 BENG A PORTION CF 77E SE 114 OF ThE 1E 1/4 OF SECTION Az T 3 3, R 12 W, SERI, N ThE CITY OF DOWIIEY, COUNTY OF LOS AIMEZES STATE OF CALFORMA R.2000' 1 4 63' - /�-- 93818' /•�_ N 893210' E 132243' I R -2040' �1> I `1 EXHIBIT WB" LENTERU E OF STEWART AND RAY AS SHORN OM PARCa MAP N0. 15573 P.At& 186/18 S TEWART AND GRAY 5. —N 8931'31' E $ 30651' --� 7 3S, f W N 8931',r E 17a0Z -_,„. A.P.N. 6284- 024 -900\ r !3 El 1■ @i N 89'.5'31' E *..JO.07' /// /// t. " N 8931 E 30604' MAMV7ENANCE EASEMENT AREA s 40000.57 SE wn. LIE OF OF SEC. 6 TT3S. R. 12 NL. &&M 1/4 COX LAME OF THE NE 1/4 OF THE SE 1/4 ��W OF SEC. 16 7: 3 S. R 12 NL. SRM N 30' E A.P.IL 6284 -024 -027 POR . E 1/ Ipt 3 NE 1/4, SEC JO 50' AeANOa rm SPAR A.P.N. 8284 -024 -028 a EXHIBIT "K" A LICENSE FOR STAGING, PRE - CONSTRUCTION, AND CONSTRUCTION PURPOSES OVER ALL THAT CERTAIN REAL PROPERTY SITUTATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 10, TOWNSHIP 3 SOUTH, RANGE 12 WEST, S.B.M., IN THE CITY OF DOWNEY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON THE MAP OF THE SOUTHWESTERN PORTION OF THE RANCHO SANTA GERTRUDES, RECORDED IN BOOK 1 PAGE 502 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EASTERLY LINE OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10, SAID LINE ALSO BEING THE CENTERLINE OF WOODRUFF AVENUE (100 FEET WIDE), WITH THE EASTERLY PROLONGATION OF THE CENTERLINE OF STEWART AND GRAY ROAD (80 FEET WIDE), AS SHOWN ON PARCEL MAP NO. 15573, RECORDED IN BOOK 186 PAGE 18, OF PARCEL MAPS, RECORDS OF SAID COUNTY, THENCE WESTERLY ALONG SAID EASTERLY PROLONGATION OF THE CENTERLINE OF, THE CENTERLINE OF, AND THE WESTERLY PROLOGATION OF THE CENTERLINE OF SAID STEWART AND GRAY ROAD AS SHOWN PER SAID PARCEL MAP 15573, SOUTH 89 DEGREES 52' 30" WEST 1322.43 FEET TO THE WESTERLY LINE OF SAID NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 10; THENCE SOUTHERLY ALONG SAID WESTERLY LINE 216.58 FEET, MORE OR LESS, TO THE NORTHWESTERLY CORNER OF LAND GRANTED TO INCO EXPRESS, INC., A WASHINGTON CORPORATION, PER DOCUMENT NO. 5, RECORDED ON JULY 29, 1976, O.R.; THENCE EASTERLY, ALONG THE NORTHERLY LINE SAID LAND GRANTED TO INCO EXPRESS, NORTH 89 DEGREES 51' 31" EAST 300.51 FEET; THENCE LEAVING SAID NORHTERLY LINE, SOUTH 00 DEGREES 02' 21" WEST 162.05 FEET TO THE TRUE PONT OF BEGINNING; THENCE SOUTH 89 DEGREES 51' 31" WEST 300.04 FEET, TO SAID WESTERLY OF THE NE 1 /4 OF THE SE 1 /4 OF SECTION 10, T. 3 S., R. 12 W., S.B.M.; THENCE NORTHERLY ALONG SAID WESTERLY LINE, NORTH 00 DEGREES 07' 02" WEST 10.00 FEET; THENCE NORTH 89 DEGREES 51' 31" EAST 300.07 FEET, TO TRUE POINT OF BEGINNING. SAID LICENSE AREA CONTAINS 3,000.57 SQUARE FEET, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "K" ATTACHED HERETO, AND BY REFERENCE, MADE A PART HEREOF. N 8952'30' E 5836' A P.IL R28•024-027 \j„--N 8931 E v N 8931'31' E 30Q04' UCENSED AREA AREA or 3,000:57 SF. EXHIBIT 'le A V.00 FOOT W EASEMENT FOR MANTENANCE PLFOSES OVER A A PORTION OF 11929 WOODRLFF A VEME - DOWAEY, CA 90241 BEING A PORTION OF 77E SE 1/4 OF 7HE AE 1/4 OF SEC770N V, T. 3 5, R 12 W, S, N TEE QTY OF DOWAEY, COMITY OF LOS ANGLES, STATE OF CALFORIVM CEN7ERUNE OF STEWART AND RAY AS SHOWN 1 ON PARCa MAP NO. 15574 P.M.B. 186/18 S TBWART AND GRAY 939116' � / _ 64 V ix eg).8 p c g N 89 3'1' E - 07' !; (ASE OF THE NE 1/4 OF THE SE 1/4 ZC OF SEC 1a T. 3 S, R. 12 W, SEAL N 8932'30' E 132243' FOR., SE I/4, NF' 11-4, Sir XJ - -N 8951'31' E '' maw' 7 35, FH2W 17807' - -y A.P.N. 6284 -024 -900 \ E'Y LNME or INE NE 1/4 OF THE SE OF SEC. 10. T. 3 S, R 12 W. SAAR A.P.It 6284- 024 -016 1 50' ABANDONED SP.RR W 7 WOODRUFF AVEN E T. P.O.B. 0051' 31' E — 70.00 A.P.IK 6284 -024 -025 ROBERT G. MARTINEZ P.LS. 6966 Exp. 9 -30 -1 1 This agreement ( "Agreement ") is entered between City of Downey ( "City") and Frozen Food Express Industries, Inc. ( "FFE ") as of the date of last execution below. RECITALS AGREEMENT RE LEASED PREMISES City is acquiring the property at 11941 Woodruff Avenue, Downey, California subject to an existing lease between Inco Express, Inc. and FFE bearing the date November I, 1999, for an original term of twelve years with two renewal options of five years each exercisable no later than nine months prior to the expiration of the original lease term ( "Lease "). The Leased premises consist of "[a]n approximately 29,400 sq. ft. concrete tilt -up warehouse and adjacent concrete garage, plus an approximately 30,000 sq. ft. paved truck storage yard" (the "Premises "). The City does not desire to terminate the Lease prior to its natural expiration of the original Lease term in November 2011 or to cause FFE's displacement from the premises. FFE desires to terminate the Lease before its expiration in November 2011 together with its obligation to pay rent and other leasehold expenses, and FFE will not exercise its first option to renew the Lease commencing thereafter, and hereby formally notifies the City of same . WHEREFORE, City and FFE agree as follows: Lease Terms and Obligations. FFE will continue to occupy the premises under the existing Lease. On November 30, 2010 or the date that FFE completely vacates the premises, whichever is later the City will take over all of FFE's duties, rights, obligations and the like under the Lease, including, but not limited to all financial obligations, inclusive of payment of rent and other leasehold costs, regarding the Premises and the Lease. City will agree to waive its right to collect rent and other leasehold costs from FFE for the remaining term of the Lease in exchange for FFE agreeing to waive any and all claims it may have against City for any costs to relocate its existing business operations and/or fixtures, equipment and furniture. The Agreement between the parties hereto is an indemnity/hold harmless agreement wherein the City has agreed to indemnify and hold harmless FFE from, and regard to, any and all Lease obligations and any and all liabilities, claims, damages, suits, and the like, arising out of contract and/or tort, which may be incurred from November 30, 2010 or the date that FFE completely vacates the premises, whichever is later, forward with respect to the Premises and the Lease. The City has, through its counsel, analyzed the Lease and agrees that, in the event of a dispute, the City will not raise any issues, defenses or arguments regarding the lack of consent by the Lessor/Landlord in order to invalidate or otherwise dispense of this Agreement. FEE, likewise will indemnify and hold harmless the City from, and regard to, any and all liabilities, claims, damages, suits, and the like, arising out of contract and/or tort, which may be incurred up to and including November 30, 2010 or the date that FFE completely vacates the premises, whichever is later, with respect to the Lease. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter contained herein. This Agreement may only be modified or amended by a written instrument executed by both parties to the Agreement. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. Successors and Assigns. Each covenant and condition contained in this Agreement shall inure to the benefit of and be binding on the parties to this Agreement and their respective personal representatives, successors and assigns. Attorneys' Fees: Costs of Litigation. If any legal action or any other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees and other costs incurred in that action or proceeding. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees or attorneys, without duress or coercion. ,+C4D Date: O / 2 _ , J J D ozen Frozen Food Express ndustries, Inc. t City of Downey Mayor Anne M. Bayer Date: